Rome

THE euro area banking system remains under pressure, despite the reassuring results of the latest stress tests on European banks. The problem of non-performing loans in peripheral countries is increasing the sector's capital needs. Italy's Monte dei Paschi is a case in point, but certainly not the only one.

Since early 2016, European Union "bail-in regulations" have sent shockwaves through the market, with a further collapse following the UK vote to leave the EU. European bank stocks have declined by 30 per cent on average, compared with 10 per cent for the market as a whole.