Italy government calls meeting Monday to finalise bank fund plan: sources
By Stefano Bernabei
ROME (Reuters) - Italy's largest banks will meet the Treasury and central bank on Monday to thrash out a plan to set up a state-backed fund to buy bad loans and plug capital shortfalls at its ailing banks, five sources familiar with the matter said on Sunday.
Italy's government is anxious to assuage concerns about its banking system, which fared badly in financial stress tests carried out by the European Central Bank and is groaning under the weight of 360 billion euros ($410 billion) in bad loans.
The fund's precise mandate still needs to be decided, the sources said. Possibilities include buying non-performing loans and helping recapitalise weak banks.
An announcement could be finalised as early as Monday.
The fund would have a maximum capitalisation of 5 billion euros, one of the sources said, adding state holding company Cassa Depositi e Prestiti would contribute no more than 300 million euros.
Prime Minister Matteo Renzi's government wants the fund to be majority-owned by private investors, to seek to comply with European rules limiting state aid.
The Treasury did not immediately respond to a request for comment. Continued...