Europe could be plunged into a new economic crisis later this week amid fears about the health of the Italian banking system.
On Friday, the European Banking Authority will release the results of comprehensive stress tests from 51 banks across Europe covering 70 per cent of the sector.
The tests will focus on the use of capital guidance to cover potential shortfalls and many fear disastrous results for Italian lenders including the world's oldest bank, Banca Monte Paschi which is also the country's third biggest lender.
The results have been the subject of discussion at a meeting of G20 Finance bosses in China over the weekend. Investors and political leaders fear that nearly $560 billion worth of bad debts held by Italian banks could trigger a new financial crisis in the eurozone already struggling with a Greek bailout and the unknown implications of the second biggest economy leaving after Brexit.
Italian banks are reported to have around 360 billion euros ($560 billion) in non-performing loans. That restricts economic growth as it reduces the amount banks are able to lend and can be disastrous if companies find their debts called in or access to funds cut off.