Reuters | Jan 12, 2019 15:50
MILAN (Reuters) - Nationalising Italy's Banca Carige (MI:CRGI) would not be possible under European rules, a senior senator has said, countering suggestions by other members of ruling coalition parties that this would be an option for the troubled bank.
The government set up a 1.3 billion euro (£1.16 billion) fund this week to shore up Carige after the European Central Bank put it under temporary administration following the bank's failure to raise capital from investors.
Rome has several options for state support, including state-backed precautionary recapitalisation.
The leader of the ruling 5-Star Movement, Luigi Di Maio, has said Carige would be nationalised if the state put money in, comments echoed by members of the League Party which is also part of the ruling coalition, although Economy Minister Giovanni Tria has said he prefers a market solution.
"I am not aware that a nationalisation is a doable path under current rules," Alberto Bagnai, the head of the senate finance committee, told Milano Finanza on Saturday when asked whether it would be better to put Carige in state hands.
Bagnai, an economist and a eurosceptic senator from the right-wing League party, said rules can be "interpreted for friends" but the ruling 5-Star and League coalition "does not yet have many friends in Europe".
Bagnai could not immediately be reached for comment.
Claudio Borghi, another League politician who heads the lower house's budget committee, said one option was to combine Carige with Monte dei Paschi (MI:BMPS), a bank that was bailed out by the state in 2016.
Carige's troubles stem from decades of mismanagement and too much exposure to the depressed local economy.
The ECB has pushed Carige to seek a merger with a stronger rival. Finding a buyer is now one of the tasks of the three commissioners appointed to run Italy's tenth-largest bank.
One of the commissioners said this week nationalisation was not currently an option.
Two sources told Reuters on Thursday that Italy's biggest bank UniCredit (MI:CRDI) might consider buying Carige if such a deal came with state financial support.
Written By: Reuters
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.