The central bank of Italy has launched a new system to undertake a €3.6bn rescue plan for four savings banks: The good banks will be recapitalized by a fund financed by the country's lenders, the so-called Resolution Fund, to increase the four banks' capital to a level equal to 9% of their risk-weighted assets. Monte dei The cost of the rescue will be borne by Italy's healthy banks, such as UniCredit, Intesa Sanpaolo and UBI Banca, which will pay into the newly-created National Resolution Fund, and not by taxpayers. Although the banks are not large enough to pose a systemic risk to Italy's banking system, it is feared that under the new rules a rescue could entail losses on bonds sold to retail clients.
The central bank of Italy has launched a new system to undertake a €3.6bn rescue plan for four savings banks: Monte dei The cost of the rescue will be borne by Italy's healthy banks, such as UniCredit, Intesa Sanpaolo and UBI Banca, which will pay into the newly-created National Resolution Fund, and not by taxpayers. Although the banks are not large enough to pose a systemic risk to Italy's banking system, it is feared that under the new rules a rescue could entail losses on bonds sold to retail clients.