With central banks ready to raid their emergency tool kits and the ECB rapidly absorbing most of the euro area’s bond market, it is perhaps understandable that Brexit hasn’t triggered a wider deterioration in European financial conditions. The economy however will take a hit in coming months as the UK is an important market for many euro area exporters.
That said, Brexit has had a significant impact on European banks, especially Italian lenders. Currently, Italian non-performing loans stand at around €210bn-360bn, or around 20% of GDP. Click above to watch the full video or below for our latest report on Italian banks and Brexit contagion.