Italy's highest bond yields since the birth of the euro are reverberating through the financial system of Europe's biggest debt issuer, driving lenders to seek record amounts of central bank financing.
Italian banks borrowed 111.3 billion euros ($152 billion) from the European Central Bank at the end of October, up from 104.7 billion euros in September and 41.3 billion euros in June, Bank of Italy data show. The five biggest lenders — UniCredit SpA, Intesa Sanpaolo, Banca Monte dei Paschi di Siena SpA, Banco Popolare SC and UBI Banca ScpA — accounted for 61 percent of the country's use of ECB resources in September, almost double the share in January.
After punishing Greece, Ireland and Portugal for their rising debt loads, the bond market is now targeting Italy, pushing bonds yields in the euro zone's third-largest economy above 7 percent as the nation's lenders prepare to refinance $120 billion of debt maturing next year. Italy's $2 trillion in liabilities exceed those three countries combined, plus Spain.
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