Coronavirus derails southern Europe's clean-up from the last crisis
This year was meant to mark a turning point for Greek and Italian banks as they finally laid the ghosts of the financial crisis to rest. Then the coronavirus struck.
Greek banks had been lining up buyers for billions of euros of bad debt to free up their balance sheets while Italian banks had just sold risky bonds at record-low yields as investors rewarded them for offloading many of their problem loans.
But as the pandemic sends economies into free fall, the recuperation of Italian and Greek banks has come to an abrupt halt, threatening to derail the recovery of the European Union's two most heavily indebted countries.
Despite government aid packages, the proportion of bank loans to businesses and individuals going bad is expected to surge, posing a new challenge for lenders for years to come and weakening the support they can offer their vulnerable economies....