Italy’s Economy and Finance Pier Carlo Padoan says a “solution” safeguarding banks now in a difficult situation– Banca Popolare di Vicenza and Veneto Banca – is very imminent and talks with EU authorities are reassuring.
Italy’s treasury said on Tuesday, “The minister reiterates that the solution does not forsee any form of bail in and senior bondholders and deposit holders will in any case be completely guaranteed.”
Italy is hoping to come to a preliminary agreement with EU officials before the month ends.
In a statement of the IMF:
“For problem banks, swift recapitalization or the timely and effective use of the resolution framework is essential to avoid weaknesses from lingering too long, burdening the rest of the system, and threatening stability.
Where burden sharing or bail-in is required, protection should be provided for vulnerable households. Any cases of mis-selling should be addressed by the regulatory and supervisory authorities as well as the banks.”
The big banks have been securing talks with Rome and Brussels which started a week ago about Italy’s finance system pushing the €1.2bn Euros to cover losses made so as to prepare for the precautionary recapitalization funded by the nation.
Following these, the two big banks of Italy, UniCredit and Intesa Sanpaolo, which are the cornerstone of loaning in Italy’s business centered north east would confront resolution before the month’s over.
Both banks have leaked deposits since the occurrence of bad loans was worsened by a financial mis-selling scandal.