Capital flight from Italian banks reaches €270bn
Capital ouflow from Italy to Northern Europe was more than €270bn at the end of March, according to the latest data published by the Bank of Italy.
In its bullettin “Evoluzione dei saldi del sistema di pagamento Target 2”, the Italian central bank reported a constant outflow of money from Italian to foreign banks which was at €200bn at the end of December 2011, and is expected to have reached €274bn at the end of March.
Data included all payments, imports and foreign investments completed within the Italian economic region and intermediated by domestic banks through the Bank of Italy.
According to the Bank, since the onset of the financial crisis, the European interbank payment system Target 2 has recorded a strong capital outflow from Italy to safe- haven countries.
The high Italian public debt and its economic crisis have worsened the trend, with negative consequences for Italian banks.
In a recent report, Citigroup said the possibility of capital outflows from peripheral European countries is one of the biggest risks in the current economic crisis.
According to the bank, the European Central Bank would have to outweight capital flows with a €800bn capital injection.