Well the market has responded fairly calmly to the Italian referendum result: in the end, for once this year in a major poll, the pollsters got one right and the government duly lost.
Now that the referendum is out of the way, there is simply no excuse for the banking sector to delay further: it has to sort out sector issues that date back years.
For starters, there is upwards of €350bn of bad and doubtful loans on the banks’ books.
This figure will rise higher still if the already weak economy declines further.
There is no shortage of enthusiasm from private equity and no shortage of capital to snap up non-performing loans.
One option is for the incoming government to create a so-called ‘bad bank’ to assist banks to sell their bad debts.
Next on the agenda should be major banking M&A in Italy.
Put simply – there are too many small and medium-sized banks.
It has long been argued that Europe as a whole is overbanked.
Europe has 130 large banks, that is, banks with over €30bn of assets, one of the criteria according to which banks come under the supervision of the ECB.
This, for an economy of €15.3trn, so roughly one bank per €118bn of GDP compared to 302bn in the US, and one per €214bn in Canada.
The overbanked argument is at its strongest in Italy and surely now we will see some activity.
UniCredit, that most important of Italy’s lenders given its scale, has witnessed a drop in its market cap of over 60% in just over a year.
It is not alone: Italy’s largest 12 banks have between them lost more than one half of their market cap this year.
The market does not have long to wait for release of UniCredit’s latest strategic review: its investor day is on 13 December.
The sale of its stake in Pekao in Poland and the probable sale of its Pioneer Global Asset Management unit are moves in the right direction but not enough to avoid a rights issue.
It will not however require state support.
By contrast, there is the world’s oldest bank, the 544 year old MPS.
It has burned through €12bn and needs to raise at least another €5bn and counting.
A share sale and debt conversion looks a non-runner.
It is hard to see how MPS can avoid a government bailout and conversion of subordinated debt into equity.
But even if MPS manages to fund another rescue and that is a big if – the issue remains: too many banks, mega bad loans and political uncertainty.
The new government faces many challenges with the financial sector problems high on its agenda.
Investors in Italian banks are not just hedge funds or pension funds – they are retail depositors and SMEs.
Woe betide the Italian government if the small investor is hammered with losses as the likely winners, according to the pollsters, will be the anti-Euro, anti-establishment 5 star movement.
That might just be another election the pollsters would call correctly.