In­vestors need cen­tral banks to spark rally, Uni­Credit CEO says

The Pak Banker - - COMPANIES/BOSS -

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).

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