Staff of Reuters 2 minutes Reuters, ReadROME, July 6 – Italy’s economy is strengthening and will continue to do so for the next two years, but several of the country’s small banks are expected to suffer crises in the next months, according to the president of the country’s central bank. “After last year’s sharp recession, the economic recovery is stabilizing,” Bank of Italy Governor Ignazio Visco said in an address to Italy’s banking association. Thanks to a “decisive strengthening” in the second half of the year, he confirmed the Bank of Italy’s prediction of roughly 5% growth in 2021. “The growth phase should stabilize and last for the next two years,” Visco predicted. In terms of the banking system, Visco stated that Italian lenders have enough capital buffers and that the ratio of new bad loans to total loans is stable at 1.1 percent. However, as a result of last year’s record economic recession, bad loans are expected to rise in the coming months, according to Visco, who also warned that some of the country’s smaller banks, some of which have “severe fragilities,” will face problems. Reporting Gavin Jones’s work/n
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