Italy struggles to push beforehand with sale of 4 small banks

through Stefano Bernabei and Paola Arosio economy minister met with senior Italian bankers and the financial institution of Italy governor on Monday to try and push forward with a sale of four small banks that were rescued from bankruptcy remaining November.

The meeting comes just days after a closing date to sell the banks became extended for a 2d time. If the 4 banks cannot be offered within  years of last November's rescue, Italy risks having to wind them down under difficult eu guidelines that came into force this 12 months.

The sale of Banca Marche, Popolare Etruria, CariFerrara and CariChieti, has come to be the latest banking headache for Italy's government, that's already suffering to kind out the country's 0.33 biggest bank, Monte dei Paschi di Siena (BMPS.MI).

"there's most effective one object on the time table; how to find a solution for the (4) banks," a supply, who declined to be named because the talks are private, said.

economic system minister Pier Carlo Padoan referred to as the meeting on Monday with the bosses of Intesa Sanpaolo (ISP.MI), UniCredit (CRDI.MI) and UBI (UBI.MI) and bank of Italy Governor Ignazio Visco. Padoan stated the meeting have been referred to as to deal "with a scenario of transition now not of disaster."

The source also stated the ecu vital financial institution become "putting up ever greater hurdles" within the sale process. "We have to discover a answer now due to the fact we can't keep on with this uncertainty."

The 4 banks have been rescued ultimate year at a fee of three.75 billion euros ($four.21 billion), which turned into performed via a fund financed with the aid of the united states's different banks. Intesa Sanpaolo (ISP.MI), UniCredit (CRDI.MI) and UBI (UBI.MI) lent 1.sixty five billion euros to the fund.

The banks that contributed the money have been hoping to recoup at least a number of thru a sale of the 4 banks. This became initially because of take vicinity through the stop of April however was postponed to the stop of September to present greater time to draw consumers.

The bank of Italy rejected bids from personal fairness finances over the summer because they have been too low, the assets said.

An opportunity solution in which UBI would purchase three of the 4 banks also ran into problem because of situations set by the ECB to clean the deal.

assets near the matter stated on Monday the ECB turned into worrying a six hundred-million euro capital growth with the aid of UBI, double the amount the financial institution is willing to raise. UBI became inclined to pay most effective a "symbolic price" for the ill banks, one source stated.

Italy's main financial institutions have already contributed 4.25 billion euros to a bank rescue fund - Atlante -this yr. Atlante bailed out regional banks Popolare di Vicenza and Veneto Banca and is also intended to take part in Monte dei Paschi's bailout plan by way of buying a bit of its bad loans.

Italy, not like Spain and eire, did no longer step in to help its banks during the 2008 monetary disaster. because then recession has saddled Italian banks with 360 billion euros in soured money owed but the government now has fewer options in terms of fixing the banks due to new strict european guidelines curbing country useful resource to lenders.