By Stefano Bernabei and Paola Arosio
ROME (Reuters) - Italy is engineering the rescue of three ailing banks using a fund financed by other lenders to help plug a capital shortfall of at least 2.2 billion euros (1.62 billion pounds), two sources with knowledge of the matter said.
The Bank of Italy has put the three small lenders -- Banca Marche, Banca Popolare dell'Etruria and Cassa di Risparmio di Ferrara (Carife) -- under special administration after audits exposed holes in their accounts.
Details of the rescue scheme are still sketchy but with all three banks urgently needing fresh cash, a fund originally set up by Italian banks to guarantee depositors has been drafted in by the authorities to provide the bulk of the funds.
The fund pledged last week to underwrite a share sale at Banca Marche, with sources putting the size of the cash call at around 1.2 billion euros.
That came after Carife in July approved a 300 million euro share issue reserved to the deposit-guarantee fund.
While the fund has yet to decide how much it needs to fork out to help Popolare dell'Etruria, the estimate is for at least another 300 million euros, the sources said.
On top of this, some 400 million euros of subordinated bonds issued by Banca Marche would be converted into shares of the bank in line with new European "bail-in" rules that shift the burden of saving failing banks from taxpayers to investors.
The new rules kick in at the start of 2016 but the rules on the conversion of junior debt can be enforced already this year.
As a result of the recapitalisation plan, the Fondo Interbancario di Tutela dei Depositi, which protects depositors from losses of up to 100,000 euros each if a bank collapses, is set to become a major shareholder in the three lenders.
The fund said last week it needed a green light from the European Central Bank before becoming the controlling investor in Banca Marche.
The rescue could cost heavyweights that are the top contributors to the fund, such as Intesa Sanpaolo (MI:ISP) and UniCredit (MI:CRDI), around 200 million euros each, according to a third source.
Thousands of Italian companies have gone bust during a three-year recession that ended in late 2014, saddling lenders with nearly 200 billion euros in loans unlikely to be repaid.
The bulk of Italy's 650 banks are small and focus on lending to companies. They were hit the worst during the economic slump as large loan writedowns plunged them into the red and ate into their capital base.
In July this year officials appointed by the Bank of Italy were running a total of 15 banks.