Italy commits €17bn to clean up two failed lenders in the country’s largest bank rescue
Milan — Italy orchestrated its biggest bank rescue on record, committing as much as €17bn to clean up two failed banks in one of its wealthiest regions, a deal that raises questions about the consistency of Europe’s bank regulations. The intervention at Banca Popolare di Vicenza and Veneto Banca includes state support for Intesa Sanpaolo to acquire their good assets for a token amount, Finance Minister Pier Carlo Padoan said on Sunday after an emergency cabinet meeting in Rome. Milan-based Intesa can initially tap about €5.2bn to take on some assets without hurting capital ratios, Padoan said. The European Commission approved the plan. The agreement bolstered bank stocks across Europe, with Intesa leading gainers, while putting into question the effectiveness of European rules meant to ensure that private investors share the burden of bank bailouts. Just a few weeks ago, Spain’s struggling Banco Popular Espanol was wound down without state aid. Italy, which wants to avoid imposing l...
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