On February 23, Italy announced it would be placing several towns in the north of the country under quarantine, in a bid to halt the spread of what has become the biggest cluster of Coronavirus cases outside Asia. As of February 24, there had been more than 200 confirmed cases of the Covid-19 virus in Italy, with seven people in the country having reportedly died of the illness.
The blockade will affect around 50,000 people based in several towns across the Lombardy and Veneto regions. These two regions make up about a third of Italy’s economic output, and concerns are growing about the possible knock-on effect on the country’s struggling economy.
The Italian economy contracted by 0.34% in the final four months of 2019, following anaemic growth across the first three quarters of the year.
Three out of five of Italy’s largest banks by Tier 1 capital are headquartered in Lombardy, and all five of its largest banks are based in northern regions. The country’s banks have struggled with profitability in recent years, with four out of five of its largest banks seeing a decline in pre-tax profits year-on-year, between 2017 and 2018. Banca Monte dei Paschi di Siena (third largest bank) and Banco Popolare di Milano (fourth largest) both made pre-tax losses in 2018.
