Italy Economy Minister: EU’s Bank Bail-In Rules Should Be Scrapped

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Today, Giovanni Tria, the Economy Minister of Italy, said that the “bail-in” rules of the European Union that are covering failing banks should be scrapped.

Tria informed the parliament that he agreed with the remarks of the head of the banking lobby of Italy, Antonio Patuelli, who earlier in the day said that the rules should be abolished since they negatively affect the confidence of savers, and in any case had never been applied in Italy.

The bail-in rules are designed after the global financial crisis to shield taxpayers from costly bank bailouts. It required investors in a bank to bear the losses before public funds can be tapped.

Tria said to a Senate panel: “Of course I share the opinion of Patuelli,”

He noted that when the rules were introduced by the economy minister of Italy, it had been “practically blackmailed” by his German counterpart and feared that if he had not accepted them it would have sent a message that the banks of Italy were close to collapse.

Later in the day, Tria’s office issued a statement saying that he regretted his “unfortunate” remark regarding blackmail.

He said that he had merely meant to describe an “objective situation” in which an Italian refusal to adopt the bail-in rules could have been interpreted as a manifestation that the banking system of the country was experiencing some difficulties.

The statement said: “The minister did not intend to make a specific accusation either against Germany or against the German finance minister of the time.”