martedì 24 marzo 2026
lunedì 23 marzo 2026
The risk of a financial crisis and a new recession
Deregulation
Financial markets are experiencing
a renewed wave of deregulation in 2025-2026, particularly in the US and EU,
aiming to boost competitiveness and corporate growth. Critics argue this
loosening threatens financial stability, weakens oversight, and poses risks
similar to pre-2008 levels. Key areas include easing leverage rules, reducing
capital requirements for banks, and relaxing oversight on non-bank financial
institutions.
Current Deregulatory Trends:
- US
Banking Easing: FDIC and federal regulators have eased key
leverage rules for banks, allowing reduced capital requirements.
- EU
Competitiveness Focus: The European Commission launched
"simplification omnibus packages" in 2025 to reduce reporting
burdens on banks, driven by calls for enhanced competitiveness.
- Private
Credit Growth: Alternative lenders and private credit markets are
operating with reduced oversight, growing rapidly
Concerns About Current Policies:
·
Stability Risks: Reduced
capital requirements may limit the ability of banks to withstand crises.
·
Return of Risks: The
resurgence of deregulatory agendas is often viewed as a trade-off, where
near-term profitability for banks comes at the cost of future financial
instability.
·
Weakened Oversight: Critics
argue that the dismantling of protections established after the 2008 financial
crisis (like Dodd-Frank) could lead to increased fraud and reduced market
integrity.
https://www.ecb.europa.eu/press/key/date/2025/html/ecb.sp251003_1~edb1443d00.en.html
The Dodd-Frank Act
The Dodd-Frank Wall Street Reform
and Consumer Protection Act (2010) is a sweeping U.S. federal law enacted in
response to the 2008 financial crisis to decrease risk in the financial system.
It established stricter regulations on banks, non-bank financial institutions,
and derivatives markets, while creating the Consumer Financial Protection
Bureau (CFPB) to prevent predatory lending.
Key Components and Impact:
- Consumer
Financial Protection Bureau (CFPB): Created an independent agency
to protect consumers in the financial marketplace, overseeing mortgages,
credit cards, and loans.
- Volcker
Rule: Limits the ability of U.S. banks to make certain kinds of
speculative investments that do not benefit their customers, effectively
restricting proprietary trading.
- "Too
Big to Fail" Mitigation: Aims to mitigate risks from large
financial institutions whose failure could trigger a systemic crisis,
establishing mechanisms for their orderly liquidation.
- Financial
Stability Oversight Council (FSOC): Established to monitor risks
to the entire U.S. financial system.
- Derivatives
Regulation: Increased transparency and oversight in the swaps
market, regulating swap dealers and requiring margin requirements.
- Whistleblower
Program: Enhanced the SEC’s authority to reward whistleblowers
who provide information leading to successful enforcement actions.
- Origin: Signed
into law by President Barack Obama in July 2010 following the "Great
Recession".
- Criticisms
& Changes: Critics, including financial institutions, often argue
the law imposes excessive compliance costs, particularly on smaller banks.
In 2018, Congress passed legislation that rolled back parts of the act,
easing regulations on many small-to-medium-sized banks.
The Dodd-Frank Act represents the most significant overhaul of financial regulation in the U.S. since the Great Depression.
The Growing Shadow Banking Problem
Financial markets are facing
renewed concerns regarding excessive deregulation, with shadow banking (also
known as non-bank financial intermediation, or NBFI) acting as a primary source
of systemic risk, according to reports from late 2025 and early 2026. While
traditional banks have become more regulated since the 2008 financial crisis,
risk has shifted to less regulated non-bank entities—such as hedge funds,
private credit providers, and investment funds—which now account for
approximately 51% of global financial assets, or roughly $256.8 trillion.
- Rapid
Expansion: Shadow banking (non-bank financial intermediation) is
growing at nearly double the rate of traditional lenders.
- Systemic
Risk: The sector is characterized by high leverage, maturity
mismatches, and opacity, which can create systemic risks to the broader
financial system.
- Data
Gaps: Global regulators, including the Financial Stability Board
(FSB), have warned they are "blind" to many dangers in this
sector due to severe data limitations, particularly regarding private
credit.
- Failed
Oversight: Despite the 2008 crisis being triggered by shadow banking,
reforms like Dodd-Frank primarily targeted traditional banks, leaving the
"shadow" sector largely intact.
While the global financial system
is generally considered better capitalized than in 2008, analysts argue that a
new "casino" of unregulated credit has emerged. The resurgence of
financial deregulation, often aimed at promoting growth, has "sown the
seeds of future instability," as some analysts fear another crisis could
stem from the opaque shadow banking sector.
Key Public Debt & Risk Factors
for 2026
Entering 2026, the global financial
market is characterized by a "resilient but risky" environment, where
high public debt levels (exceeding 235% of world GDP) are putting pressure on
sovereign issuers amid high, albeit potentially peaking, interest rates. While
a widespread sovereign default crisis is not the base case, the risk of
"bond vigilantes" driving up yields is increasing, particularly for
countries with high deficits.
- US
Debt Ceiling and Deficits: The US faces renewed risks around its debt
ceiling, with potential for instability in November 2026. The US federal
deficit is projected to reach $1.9 trillion in FY 2026, with debt held by
the public expected to reach 101% of GDP, rising toward 120% by 2036.
- European
Sovereign Pressure: Europe is experiencing structural headwinds, with
France facing high debt and a "relentlessly up" probability of
default for its corporates, alongside high 10-year real yields. Italy is
also seen as having volatile debt, with persistent risks from stagnant GDP
growth.
- Market
Vulnerability: Potential for turmoil in government debt markets is
considered the biggest risk, with the capacity to trigger sharp increases
in interest rates and market volatility.
Italy
As of early 2026, Italy's public
debt remains a significant area of focus for financial markets, characterized
by high debt-to-GDP levels, but with a generally stable outlook from rating
agencies. While the risk of default is deemed low in the short term, the
sustainability of the debt depends on future economic growth, deficit
reduction, and ECB interest rate policies
·
Default
Risk: Fitch Ratings affirmed Italy’s Long-Term Foreign-Currency Issuer Default Rating at 'BBB+' with a Stable Outlook in March 2026, citing a large, diversified economy and
benefits of eurozone membership.
·
Debt Trajectory: Public
debt is expected to continue increasing until 2027, with predictions of it
reaching 137.9% of GDP in early 2026 before potentially starting to decline in
2027-2028.
·
Deficit Targets: S&P
projects the budget deficit to marginally decline to around 2.9% of GDP in
2026, dipping below the 3% threshold, aided by measures such as taxes
on banks and insurance companies.
·
Financing Needs: In 2026,
Italy faces around EUR 256 billion in maturing securities (net of BOTs)
The Great Depression
As regards tariffs, don’t forget:
- The
Smoot-Hawley Tariff Act of 1930 (or Hawley-Smoot Act): was a U.S. law
signed by President Herbert Hoover on June 17, 1930, that raised
import duties on over 20,000 goods by roughly 20% to 60%, aiming to
protect American farmers and businesses during the Great Depression. It was sponsored by Senator Reed Smoot of Utah and Representative Willis C.
Hawley of Oregon. Over 1,000 economists warned President Hoover to veto
the legislation, warning of increased consumer prices and international
retaliation.
- Aftermath: It
is largely considered to have failed, causing a global trade war, a 66%
decline in international trade from 1929–1934, and worsened economic
conditions, contributing to the severity of the Great Depression. In 1934
under FDR, the legislation was largely rolled back by the Reciprocal Trade
Agreements Act.
martedì 17 marzo 2026
mercoledì 11 marzo 2026
Italy and the Middle East
As of 11 March 2026, Italy has maintained much of its
diplomatic presence across the Middle East, though several embassies have
operated with reduced staff, specialized "Gulf Task Force" support,
or temporary, security-related closures due to heightened regional tensions.
Based on information from the Italian Ministry of
Foreign Affairs (Farnesina) and active notices, the following key embassies
remain operational, with a focus on facilitating the departure of Italian
nationals:
- Israel
(Tel Aviv): Remained active, though it
experienced temporary closures for emergency security reasons in early
March 2026.
- Lebanon
(Beirut): The embassy remains fully
operational to assist nationals, despite staff reductions.
- Iraq
(Baghdad): Operational, but staff numbers
have been reduced for security reasons.
- Syria
(Damascus): Italy has reopened its embassy,
with a focus on long-term regional stability.
- UAE
(Abu Dhabi & Dubai): Active;
additional staff were deployed to these offices to assist with
evacuations.
- Saudi
Arabia (Riyadh & Jeddah): Operational,
but a rare "avoid travel" warning was issued for the capital and
Eastern Province in March 2026.
- Other
locations: Embassies in Amman (Jordan),
Muscat (Oman), Kuwait City (Kuwait), and Doha (Qatar) are also listed as
part of the operational network.
However.
on 6 March, The Italian government decided, "for security reasons,"
to "temporarily close" its embassy in Tehran and transfer all
diplomatic personnel to Baku, Azerbaijan,
Key Operational Statuses
- "Gulf
Task Force": Established to assist
Italians in the region.
- Consular
Services: While physical offices have
experienced temporary closures (e.g., Tel Aviv on March 2-3), assistance
is being provided via mobile teams and the digital FAST-IT platform.
- Evacuations: A
significant repatriation operation (approx. 25,000 citizens) has been carried
out primarily facilitated through UAE, Oman, and Qatar.
Note: The situation is highly fluid and,
as indicated in early March 2026, specific offices may temporarily close or
restrict access based on immediate security condition
As of 11 March 2026, Italy is actively deploying and
reinforcing its military presence in the Middle East, primarily focused
on defensive air defense assistance to Gulf states and naval
protection for Cyprus, while explicitly ruling out direct involvement in
offensive operations against Iran.
Prime Minister Giorgia Meloni stated that Italy is
coordinating with European allies to provide defensive assets, motivated by the
need to protect approximately 2,000 Italian troops already in the region and
tens of thousands of Italian citizens, following a sharp rise in regional
tensions.
Key Deployments and Operations (as of 11
March 2026):
- Air
Defense in the Gulf: Italy is deploying
advanced air defense systems (including potential SAMP/T batteries) to
Gulf nations to counter drone and missile threats.
- Naval
Presence in Cyprus: A naval unit is being
dispatched to the vicinity of Cyprus to bolster security and protect the
European partner from regional strikes.
- UNIFIL
(Lebanon): Over 1,000 Italian soldiers
remain in southern Lebanon as part of the UNIFIL peacekeeping mission.
- Maritime
Security: Italian naval units, such as
the frigate Virginio Fasan, are active in the Red Sea/Horn of
Africa area, operating under national mandates (Mediterraneo Sicuro)
rather than direct US command. The guided-missile frigate Federico
Martinengo was deployed from Taranto to the
Cyprus area to bolster security alongside European allies in response to
heightened tensions and Iranian-backed threats. It is participating in a
coordinated mission with France, Spain, and the Netherlands. It has
joined the naval group escorting the French aircraft carrier Charles de Gaulle,
which is currently operating in the area.
·
Operation Aspides:
European leaders are assessing whether the EU naval operation Aspides,
currently deployed in the Red Sea, could be used to support naval escorts
- Non-belligerent: Meloni
emphasized, "Italy is not at war with anyone and will not be at war
with anyone," aiming to avoid a third front in the ongoing regional
conflict.
- Resource
Constraints: Defense Minister Guido Crosetto
noted that Italian defense capabilities are heavily strained due to
ongoing support for Ukraine and existing commitments, making new
deployments "delicate".
- Evacuation
Readiness: The Italian government has
prepared contingency to evacuate personnel if necessary.
·
The Lobito Corridor Project
The Lobito Corridor railway project is a
transformative, US- and EU-backed infrastructure initiative developing a ~1,300
km, open-access, transcontinental rail line from Angola’s Port of Lobito to the
Democratic Republic of Congo (DRC) and Zambia. Aimed at boosting critical
mineral exports (copper/cobalt), it will drastically reduce transit times to
under a week, transforming logistics for central Africa. Connecting Zambia's
copper belt to Angola's Atlantic coast, it is scheduled to begin construction
in the third or fourth quarter of 2026
Key Aspects of the Project:
- Infrastructure
Scope: Rehabilitating the existing
Benguela railway in Angola and constructing new, greenfield lines
extending into Zambia and the DRC's mining heartland.
- Partnerships
& Funding: Supported by the US
PGI and EU Global Gateway, with over $750 million in loans
secured, including funding from the U.S. International Development Finance
Corporation.
- Economic
Impact: Aims to export up to 1 million
tonnes of material annually by 2030, bypassing congested eastern ports,
and creating jobs in logistics and agriculture.
- Strategic
Goal: The corridor is designed to provide a
faster, Western-backed alternative for transporting critical minerals for
the global green energy transition, competing with existing
Chinese-influenced routes.
The project, which includes the Lobito Atlantic Railway (LAR) consortium, is essential for
diversifying supply chains for critical raw materials (CRMs)
The Lobito Corridor will provide a major
transcontinental trade route linking Angola’s Atlantic coast to the DRC and
Zambia, with over 1,300 km of railway rehabilitation underway, backed by a $753
million financing package secured in early 2026. Key progress includes the
Lobito Atlantic Railway taking over operations, expected to reduce transit
times from weeks to just one week.
Key Progress and Developments (as of early
2026):
- Infrastructure
& Rail: The Lobito
Atlantic Railway (LAR) consortium is rehabilitating the Benguela
railway, with 1,300 km of track connecting the Port of Lobito to Luau
(Angola/DRC border).
- Financing: A
$753 million financing package was finalized in early 2026, featuring $553
million from the U.S. International Development Finance Corporation (DFC)
and $200 million from the Development Bank of Southern Africa (DBSA).
- Expansion
& Logistics: A new Greenfield Rail Line
Feasibility Study is exploring extending the line through Zambia. The
project aims to reduce freight transit times from over a month to one
week.
- Economic
Impact: The initiative is designed to
facilitate the export of critical raw materials (copper, cobalt) from the
DRC and Zambia to global markets.
- Challenges: The
project faces significant local concerns regarding land rights, with
thousands in the DRC potentially facing eviction.
https://en.wikipedia.org/wiki/Lobito_Corridor
https://www.lobitocorridorzambia.com/
https://afripoli.org/a-game-changer-in-flux-recent-developments-and-risks-in-the-lobito-corridor
domenica 8 marzo 2026
What are the main challenges for the Sahel? How should the EU respond?
The Sahel faces a compounded, rapidly growing crisis driven by intense armed conflict, extreme poverty, and severe climate change impacts. Over 33 million people need humanitarian aid due to jihadist violence, weak governance, food insecurity, and displacement, particularly in Mali, Burkina Faso, and Niger. As of early 2026, these countries in the Central Sahel region, often referred to as the Alliance of Sahel States or AES) are facing a "red alert" situation, with escalating, multi-layered crises threatening state collapse. The region is considered one of the most neglected and conflict-ridden in the world, marked by a convergence of terrorism, military coups, extreme poverty, and climate change. The region is defined by a deeply interconnected web of security, environmental, and humanitarian crises, with the Central Sahel serving as the global epicenter of violent extremism. The region faces an unprecedented, worsening crisis, characterized by a "toxic mix" of armed conflict, governance failures, and climate change that has displaced millions
Main Challenges in the Sahel:
Security and Conflict: A
surge in terrorism and violence from armed groups, leading to the rise of
military regimes and, in some areas, a collapse of state authority.
Climate Change and Environmental
Degradation: The region is highly vulnerable to
drought, desertification, and flooding, which ruin livelihoods dependent on
farming and pastoralism.
Humanitarian and Food Crisis: High
levels of food insecurity, malnutrition, and a massive displacement crisis with
over 3.7 million internally displaced people.
Political Instability and Governance: Widespread
corruption, weak state presence, and a series of coups d'état (e.g., Mali,
Burkina Faso, Niger) have created instability and increased human rights
violations.
Development and Demographic Pressure: Intense
poverty, limited education and job opportunities, and rapid population growth
create high demand for services the state cannot provide and an easy
environment for the recruiting of boys and young men to jihadist groups and
other military factions.
These factors are deeply intertwined, with climate
change fueling competition for resources, which then triggers conflict and
exacerbates the humanitarian emergency. The European Union needs to work out an
effective response to contain and manage the growing challenges to its southern
flank that are rooted in the Sahel.
Italy and the Sahel:
As of early 2026, Italy has positioned itself as a key, and increasingly
solitary, European actor in the Sahel, aiming to maintain a security and
diplomatic presence following the withdrawal of other European forces. Italy
continues to operate a small military mission in Niger, navigating the
challenging political landscape following the 2023 coup. Through the Mattei
Plan and a "new look" foreign policy, Rome is seeking to anchor
European influence in Africa, focusing on managing migration and countering Russian
and Chinese influence. Italy is thus prioritizing diplomatic, economic, and
security initiatives in the Sahel to manage migration routes as part of the
Mattei Plan, which entered its third year of implementation. The Italian
government, viewing migration from the region as a "structural
reality" rather than a temporary crisis, is actively engaging with African
nations through high-level summits, investment in local infrastructure, and
security partnerships to deter departures.
The EU and the Sahel:
The Sahel remains key to European security due to interlinked threats –
terrorism and its spillover into neighbouring countries, and organised crime
networks controlling lucrative drug and human trafficking routes to Europe.
Heightened international competition for influence and access to the region’s
mineral wealth should also caution the EU against complete disengagement. Ties
with long-standing partners such as Russia, China and Türkiye have deepened ,
while the retreat of European countries following the wave of military
takeovers created space and opened opportunities for new actors, like Iran and
India, to engage with the countries of the Alliance of Sahelian States (AES).
Anti-Western sentiment and strategic hedging have thus led to the diversification
of partnerships under the banner of ‘multipolarity’. But external actors
interpret multipolarity according to their respective agendas, while leaders of
the AES prioritise sovereignty and multi-alignment. Experts argue that the EU
should respond by pursuing targeted, interest-based cooperation on energy and
mining, alongside efforts to counter transnational terrorism and organised
crime. It should also engage more selectively in key civilian domains,
prioritising education and cooperation with civil society.
Conclusion:
The situation continues to evolve. Some commentators argue that based on
intelligence and strategic assessments for 2026, the Sahel region presents a
critical, compound danger to European security. The confluence of intensified
terrorism, Russian influence, and migration pressures is creating a
"perfect storm" that poses a direct, long-term threat to European.
Italy’s 2026 Intelligence Annual Report describes a rapidly deteriorating
security environment stretching from the Sahel to the Gulf. The escalation
around Iran now confirms many of the report’s
warnings — turning what analysts call the “Arc of
Crises” into a direct strategic concern for Europe and Italy.
https://www.iss.europa.eu/publications/briefs/multi-aligned-sahel-reframing-eus-role-crowded-region
https://www.cfr.org/global-conflict-tracker/conflict/violent-extremism-sahel
https://www.alliance-sahel.org/en/news/sahel-climate-change-challenges/
https://www.iss.europa.eu/publications/briefs/multi-aligned-sahel-reframing-eus-role-crowded-region
https://www.stimson.org/2026/the-mediterranean-north-africa-the-sahel-a-single-strategic-system/
https://decode39.com/13722/on-board-the-mattei-plan-italys-bid-to-anchor-europe-in-africa-and-india/
https://www.iai.it/en/publications/c05/mattei-plan-after-addis-ababa-italy-africa-summit