Housing recovery intact despite drop in new home sales
WASHINGTON New U.S. single-family home sales tumbled from near a 9-1/2-year high in April, but the housing recovery likely remains intact amid a tightening labor market.
BARI, Italy Italy's economy minister sought to reassure his U.S. counterpart about the state of Italian banks on Thursday, telling him he expected lenders' bad loans on their books to fall "quite rapidly", an Italian official said.
Pier Carlo Padoan and U.S. Treasury Secretary Steven Mnuchin held talks on the sidelines of a meeting of the Group of Seven industrial economies in Bari, southern Italy.
The official said the two had exchanged information about the soundness of Italian banks, which are saddled with 349 billion euros ($379 billion) of gross problematic loans - a third of the euro zone's total - that were accumulated during a sharp recession.
The official, who attended the meeting, said Mnuchin had raised the issue of Italian lenders and Padoan wanted to rectify what Rome calls foreign misconceptions about the amount of bad loans, based on out-of-date figures.
Of the bad loans, some 203 billion euros are "sofferenze" or the worst class of bad loans, where banks are exposed to insolvent borrowers.
The Rome government set aside 20 billion euros late last year to help its weaker lenders and is currently in the process of seeking European approval to bail out three banks whose attempts to raise capital privately have failed.
"The gross figure is expected to decrease quite rapidly," the official quoted Padoan as telling Mnuchin, adding he had not given a time-frame for the reduction.
He said the fall would also be the result of a number of bad loan sales recently announced or in the pipeline. UniCredit (CRDI.MI), Italy's biggest bank by assets, sold 18 billion euros of bad loans at the end of last year.
Bailout candidate Monte dei Paschi di Siena (BMPS.MI) is also negotiating a massive securitization of nearly 30 billion euros in soured debts, which European regulators want it to shift in order to be allowed to receive state aid.
"The minister emphasized the fact the net figure is much lower than the gross," the official said, referring to the fact that net sofferenze - taking into account writedowns already booked by banks - totaled 77 billion euros in March.
The European Central Bank is pressing Italian lenders to get rid of their bad loans, but banks are reluctant to do so because selling big portfolios on the market almost inevitably entails booking further writedowns and having to raise capital.
(Addiitonal reporting by Giuseppe Fonte; Editing by Tom Heneghan)
WASHINGTON The U.S. government filed a civil lawsuit on Tuesday accusing Fiat Chrysler Automobiles NV of illegally using software to bypass emission controls in 104,000 diesel vehicles sold since 2014.
NEW YORK Republicans in Congress and the White House are not "on the same page" as they aim to revamp U.S. tax policy, and the economy needs more certainty on fiscal policies in general, a Federal Reserve policymaker said on Tuesday.