Banking sector suffers hit on Italy's budget concerns
Banking sector suffered major losses on Friday as investors' concerns grew amid Italy's fiscal policy uncertainties. Political leaders and deputy prime ministers Luigi di Maio and Matteo Salvini announced a budget deficit target of 2.4% for 2019, prompting backlash from Brussels. European Union Economic Affairs Commissioner Pierre Moscovici urged the officials from Rome to respect the common rules and cut its "explosive" debt.
Banking shares dropped significantly with growing threats to the country's financial stability. UniCredit lost 8.72% at 1:56 pm CET, while Intesa Sanpaolo lost 7.95% at the same time. Shares of Mediobanca were down 6.68% at 1:57 pm CET. Meanwhile, yields saw the biggest rise since the forming of the populist government this spring, during which Italian banks' net holdings of government debt increased by over €40 billion.
In a Facebook video earlier today, Di Maio said that the markets would "come to terms with the budget," while Salvini vowed the government would "press on" with budget plans despite reactions from the EU.