Senate of Italy Votes to Crack Down on Executives of Failed Banks

On Tuesday, following numerous large government pay-outs to keep lenders who are having a hard time from imploding, the Senate of Italy unanimously voted to toughen sanctions on executives of failing banks.

In a sign for the government which has a narrow majority in the Senate, breakaway left-wing movement and opposition parties voted with Prime Minister Paolo Gentiloni on the motion. The house is also due to vote on a key budget document for 2018 next week.

The formally approved motions empower the government to bring in a quick bill regarding the responsibilities of bank managers, making it simpler to ban them from public office or professional roles if they are found guilty of wrongdoing.

In recent years, a series of rescues have turned public opinion against banks of Italy, and an investigative committee is set to meet for the first time on the issue later this week.

According to a budget document draft in 2017, bailing out the oldest bank in the world, Monte dei Paschi di Siena, and two other smaller lenders in the region of Veneto has obligated the state over 10.2 billion euros (8.95 billion pounds) in costs.

In 2015, many retail investors lost the savings they had invested in four small lenders, rocking a large network of local banks that served as advisers and financiers to families around the country for decades.

Members of the small Democratic and Progressive Movement (MDP) were among the 196 senators who voted for the motion. Their split from the ruling Democratic Party (PD) in February disintegrated the already slim upper house majority of the government.

Earlier this month, MDP stated that it would not pledge to vote for the budget after the government rowed back on a projected law that would award citizenship to the children of immigrants.

The government picked up the motion based on proposals submitted by parliamentary groups.