For Italian banks, bigger may not be better

Bankers have yet to be convinced that the merger between Italy’s Banco Popolare Società Cooperativa (BPSC) and Banca Popolare di Milano (BPIM) will be especially positive, though Moody’s says it is good news. The borrowers recently issued covered bonds have tightened in line with the rest of Italy, but they have not outperformed and still trade wider than reoffer.