Fresh crisis for Europe’s banks

ITALY’S banking system was on the brink last night as ministers and executives met to discuss a £4bn rescue package.

There are fears the country could be about to enter a fresh crisis as its financial sector buckles under the weight of £289bn of bad loans – a debt pile nearly one-fifth the size of its total economy. The bailout is being cobbled together with cash from the private sector.

It comes as fears grow again about the health of some eurozone nations. Greece – whose public debt dragged Europe to the brink last year – has been staging talks with creditors about a £4bn aid package ahead of a July deadline. There are also concerns about Portuguese banks.