Italy

At the height of the Brexit turmoil this week, another issue emerged as an important and perhaps more pressing concern: Italy is in the midst of a banking crisis. If the country cannot come up with a private solution, or convince authorities to bend EU state aid rules, up to €250bn of retail senior debt will be on the hook, writes Tyler Davies.

UniCredit’s appointment of a new CEO on Thursday raises the prospect that a rights issue for the bank could be the centrepiece of an equity capital market in the autumn that is likely to be at best subdued, after the UK’s shock vote last week to leave the European Union.

The IPO of Enav, the Italian air traffic control system, is progressing steadily, despite the shock of the UK’s decision to leave the European Union, which has sent share prices whizzing in all directions.

A stronger picture is emerging for the eurozone periphery late in the week, after the region’s governments suffered a spike in yields in the immediate aftermath of the UK’s vote to leave the European Union.

Jean-Pierre Mustier is set for a triumphant return to UniCredit less than 18 months after stepping down as head of its corporate and investment bank, as the Italian lender appointed the Frenchman as its new chief executive following a specially-convened board meeting on June 30.

Italy took advantage of a fall in its yields since a Brexit-induced spike late last week to print five year debt at a record low rate on Thursday, while Portugal announced plans for an exchange offer.

Italy could soon inject much needed capital into its banking sector, but the new measures, planned in the wake of the UK's vote to leave the EU last week, must first get past EU state aid and bail-in laws.

The two IPOs live in the European market are both progressing steadily, despite the shock of the UK’s decision to leave the European Union, which has sent share prices whizzing in all directions.

Amid the chaos in global markets on June 24, the IPO of Veneto Banca reached its expected conclusion: the book closed almost empty and the listing was cancelled, leaving Fondo Atlante, the Italian bank rescue fund, to provide the €1bn of capital Veneto had to raise.

Spain’s 10 year bonds on Monday reversed all their Brexit driven losses, after the country’s voters showed a clear preference for pro-European Union parties at a general election on Sunday.

The UK may have knocked the eurozone periphery off a cliff as it stumbled on its way out of the European Union on Friday morning. Government bond spreads on Friday echoed those during the eurozone sovereign debt crisis. The gap between Germany and the periphery has opened up like the chasm that has developed between UK voters and the political establishment.

Corrado Passera is the favoured candidate to become the next chief executive of UniCredit, but the bank’s international investors are on a collision course with its board over the appointment of a successor to Federico Ghizzoni, who stepped down last month.