Italy giving 5.2B euros in resources to keep 2 banks open

Italy giving 5.2B euros in resources to keep 2 banks open

Italy giving 5.2B euros in resources to keep 2 banks open

After Brussels had last week firmly placed the liquidation ball in Rome's court, Padoan's ministry said Friday night the government would put up around 10 billion euros of state cash to rescue the stricken Banca Popolare di Vicenza and Veneto Banca.

The banks' assets would be split into "good" and "bad".

Italian authorities said Sunday they were prepared to spend as much as EUR17 billion ($19 billion) as part of the shutdown of two regional banks, in a deal that will transfer the lenders' best assets to Intesa Sanpaolo SpA for a nominal sum.

Lewis Hamilton, Sebastian Vettel clash under Safety Car in Baku
It's risky driving and to get a 10-second penalty for that. "I like to think that I remain respectful and I'll continue to do so". Hamilton was initially reluctant to discuss the incident post-race but felt his rival should have been given a tougher sanction.

The Italian banking fund Atlante invested 3.5 billion euros ($3.9 billion) in Veneto Banca and Banca Popolare di Vicenza in 2016, but, the financial position of the two banks continued to deteriorate.

The EUR17 billion consists of EUR5.2 billion to Intesa and up to another EUR12 billion in state guarantees, including those protecting Intesa from any negative impact to its capital ratios resulting from the acquisition.

"The total resources mobilized could reach a maximum of 17 billion euros - but the immediate cost to the state is a little more than five billion", said Finance Minister Pier Carlo Padoan.

Terror, trade top agenda of Modi-Trump meeting today
Modi said India has been a victim of terrorism , but "The world did not and can not stop us". Mukesh Aghi, president of the US India Business Council, was also present at the meeting.

Rome's plan has been approved by the European Commission and avoids a bailout under potentially tougher European rules.

Intesa's offer to buy the good bank resulting from this operation was the only "significant" offer, according to an Italian government official.

Rome feared that under those rules losses could have been imposed on senior bondholders and large depositors, a politically unpalatable prospect in the run-up to elections next year. They will now face Italian insolvency proceedings. The Italian authorities said there was a good chance that the aid would eventually be recovered. In that case, European Union banking authorities found that a sale for one euro to the larger Santander bank was an acceptable solution. A EUR3.5 billion capital investment by a government-orchestrated banking fund failed to fill that gap. In March, they requested government help to stay afloat.

Consumer Issues Stemming From the GOP Health Care Initiative
Chuck Schumer, the Senate Democratic leader, said the Republican bill has "at best a 50-50 chance" of passing in its current form. Fair to say there isn't anything you like in this new plan? "Let's have the integrity to show the American people what it is".

Italian Prime Minister Paolo Gentiloni defended the move as a vital "burden-sharing, not a bail-in", aimed at saving "account-holders, savers, of these two banks, in favor of those who work in these banks, and in general in favor of the economy of the territory, one of our most important". Four other smaller banks were wound down in 2015.

Related news