Investors need central banks to spark rally, UniCredit CEO says
Investors "need a new floor" to come back to equity markets as stocks tumble, and they're looking for clear signals from the world's big central banks, according to UniCredit Chief Executive Officer Federico Ghizzoni. "One central bank alone is not enough, so there is a need for strong coordination among the most important ones in the U.S., Europe, Japan and maybe also China," Ghizzoni said in an interview with Bloomberg Television's Flavia Rotondi in Milan late Tuesday.
European banks like UniCredit are being hit by an equities selloff that has seen stock markets tumble from the U.S. and China to the U.K. The Italian lender's shares were suspended following its fourth-quarter earnings release Tuesday after falling by the market limit. The 47-member STOXX Europe 600 Banks index has dropped by 14 percent since the start of this month.
"I don't see a specific logic now in the market," Ghizzoni said. "For Italian banks, the situation is more critical than in other countries, but right now, all the European countries, all banks in Europe and also in the U.S. are under pressure."
Governments can also play a role in restoring confidence, the CEO said. He expects the Italian government to step up its efforts in resolving non-performing loans that are burdening banks in the country. UniCredit was up 2.5 percent at 2.84 euros in Milan trading as of 9:28 a.m. That cuts this year's decline to 43 percent and gives the company a market value of 17 billion euros ($19.1 billion).