Italy isn’t the only European country with ‘a systemic banking crisis’

Last week everyone was clamoring about Italy.
In the aftermath of the UK’s European Union referendum, markets started worrying about what a British exit from the EU, or Brexit, would mean for one of the euro area’s sore spots: Italian banks.
But this week attention has started to shift over to Portugal – and not just because of its victory over France in the Euro 2016 final.
Rather, markets are once again feeling antsy about the Iberian nation’s banking problems as macroeconomic conditions start to deteriorate.
‘The UK referendum hit an already vulnerable banking system in the eurozone. Italian banksare on the front burner, but the temperature is rising in Portugal,’ Marc Chandler, the global head of currency strategy at Brown Brothers Harriman, wrote in a Monday note to clients.
‘The country is struggling with a systemic banking crisis, the lack of a convincing medium-term fiscal plan and excessive public and private sector leverage,’ a Barclays team led by Antonio Garcia Pascual observed in a note to clients.

This post was published at David Stockmans Contra Corner By Elena Holodny, Business Insider ‘ July 18, 2016.