SANTA MARGHERITA LIGURE, Italy (Reuters) - Italian banks are strong and there is no need to fear possible contagion from the troubles of Spain’s banking sector, the general manager of Italian bank UniCredit (CRDI.MI) said on Saturday.
Euro zone finance ministers meet to discuss a bailout of Spain’s banks on Saturday, although officials have sought to emphasise that the Spanish troubles were spawned by a burst property bubble rather than by government finances as in Greece.
“Our banks are strong,” UniCredit’s Roberto Nicastro said at a conference of young entrepreneurs organised by business lobby Confindustria. “Spain can be in a delicate situation, but substantially we do not have to be scared about Spanish banks.”
Moody’s Investors Service said on Friday that Spain’s banking sector crisis would not pose a major source of contagion to other euro area countries as it is largely specific to the country itself. However Italy shares with Spain a growing funding reliance on the European Central Bank through its banks, Moody’s said.
“We are the only banking sector in Europe that did not need public capital,” Unicredit’s Roberto Nicastro said.
“The Spanish banking sector is generally strong, yes, it can be in a delicate situation. But they are discussing how to find a way to stabilise it,” Nicastro said.
Nicastro said Italy would not resist proposals for a political and banking union requiring nations to cede more sovereignty in order to stabilise the euro bloc.
“Italy is more oriented to accept this passage. We see resistance from other countries and not necessarily only in Germany,” he said.
Nicastro backed the idea of creating a joint deposit guarantee and a bank resolution fund. “But this cannot be done without a centralised surveillance of all banks,” he said.
Reporting by Antonella Ciancio; Editing by Ruth Pitchford