Reports suggest that Italian banks are at risk of losing a key source of funding as the sale of bank debt to consumers comes under scrutiny, after investors lost money on four firms that are being bailed out last month. The Bank of Italy said it was reviewing its lending practices in order to ensure they were not contributing to an unsustainable credit boom. Last week, Italian Finance Minister, Pier Carlo Padoan promised to partially compensate those who bought about €340m of junior notes from Banca delle Marche, Banca Popolare dell'Etruria e del Lazio, Cassa di Risparmio di Ferrara and Cassa di Risparmio della Provincia di Chieti.
Reports suggest that Italian banks are at risk of losing a key source of funding as the sale of bank debt to consumers comes under scrutiny, after investors lost money on four firms that are being bailed out last month. This led to the Bank of Italy's Senior Deputy Governor, Salvatore Rossi, telling Sky News that sales of subordinated bonds to customers should be banned. Last week, Italian Finance Minister, Pier Carlo Padoan promised to partially compensate those who bought about €340m of junior notes from Banca delle Marche, Banca Popolare dell'Etruria e del Lazio, Cassa di Risparmio di Ferrara and Cassa di Risparmio della Provincia di Chieti.