Last month's Brexit vote has battered the banking sector in general but it could be a particularly dangerous trigger for the industry in Italy.
Italian banks were already struggling with an eye-watering €360bn (£307bn) in non-performing loans between them, while shares in Unicredit, Banca Monte dei Paschi di Siena, Banco Popolare and Intesa Sanpaolo all slumped by around a quarter in the week following the Brexit decision.
Now, former director general at the Italian Treasury, Lorenzo Codogno, has told the Wall Street Journal that "Brexit could lead to a full-blown banking crisis in Italy".
Codogno continued that Italy's woes create problems for the euro countries more generally. "The risk of a eurozone meltdown is clearly there if Brexit concerns are not immediately addressed," he said.
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Michael Hewson, chief market analyst at CMC Markets UK, told City A.M. that he was similarly concerned that the combined effect of bad loans in Italian banks and Brexit could spell disaster for Europe's banks.
"If Italy goes under then it will take the rest of Europe with it," Hewson said.
Europe at large has sat up to take note of what's going on in the Mediterranean country. The European Commission has recently agreed to a guarantee scheme for a precautionary liquidity support scheme for banks in need.
It has also been reported that the Italian government may be seeking out arrangements to inject €40bn worth of capital into the banking system.
Meanwhile, Monte Paschi confirmed in a statement on Monday that it had received a letter from the European Central Bank (ECB) asking the institution to meet certain requirements. The statement also noted that the bank has the opportunity to explain any mitigating circumstances by 8 July and has until 3 October to present a plan of management actions designed to reduce the ratio between total non-performing loans and total loans to 20 per cent by 2018.
However, the situation is not entirely without hope. Although many banks have struggled to offload their bad loans, Banco Popolare revealed last Thursday – one week after the UK's EU membership vote took place – that it had agreed a sale on €53.8m worth of such debt.