Italian banking woes persist

Italy’s banking woes are set to plague prime minister Matteo Renzi for months to come after a long-sought deal with the EU on bad debts disappointed investors.

The agreement struck with the EU allowing banks to offload soured loans after buying a government guarantee will not clean up the financial system and revitalise lending as fast as some in the markets had hoped.

Banking shares dropped on the plan, which stops well short of the clean ups organised in Spain and here following the financial crisis.