In the euro area the risks for financial stability are increasing because of the slackening of growth and the persistence of very low inflation. The growth prospects for the euro area are rendered more uncertain by the fragility of the world economic recovery, whose pace differs greatly among the main areas. The financial markets appear to be exposed to spikes in volatility.
In Italy, signs of improving revenues and profitability have emerged among the larger firms, but small firms remain more exposed to the risks arising from continuing economic stagnation and difficulties in accessing credit. The property market remains weak.
The results of the European Central Bank's comprehensive assessment of the balance sheets of the main euro-area banks showed capital shortfalls for Banca Monte dei Paschi di Siena and Banca Carige, but confirm the overall soundness of the Italian banking system.
