Last week the European central bank warned that Italian banks, Banca Popolare di Vicenza and Veneto, were on the verge of failing. Over the weekend, the two banks were bailed out by a combined 17 billion Euro effort to prevent their enormous debts from seriously damaging the economy and costing an approximate 4,000 jobs. Italian prime minister, Paolo Gentiloni, stated that the bail out was needed to protect savers and ensure “the good health of our banking system”. This rescue attempt should keep the banks afloat for now and with the Italian general election coming up, it was necessary to help keep the confidence of the Italian people.
Theresa May has finally struck a deal with the Democratic Unionist Party. The deal which will see an extra £1bn for Northern Ireland, will give the Conservatives the backing of the DUP in the House of Commons votes. Northern Ireland will use the additional funding on infrastructure, health and education. The deal also ensured the triple lock guarantee of at least 2.5% rise in the state pension each year and winter fuel payments were kept, against the Conservatives’ original manifesto. The deal will apply for the length of this Parliament; however, it will be reviewed in two years’ time.
From the Eurozone today, ECB President Mario Draghi will give the introductory speech at the European Central Bank Forum. The event will continue throughout the day with various professors and economists joining in discussion panels, chaired by members of the European Central Bank’s Executive Board.
In the UK, the Bank of England will release the Financial Stability report, this will be followed by Mark Carney holding a press conference. Across the pond, the CB consumer confidence report will also be released. Finally, today will end with Fed Chair Janet Yellen speaking about global economic issues at the British Academy ‘President’s Lecture’ 2017.