Rescue of Veneto banks becomes law

BUSINESS
Rescue of Veneto banks becomes law

In a final parliamentary confidence vote on Thursday, Italy's upper house Senate approved the Italian government's plan to salvage two failing banks in the northwest.


The Senate approved the plan by 148 in favour and 91 against, passing the government's emergency decree into law.

Banca Popolare di Vicenza and Veneto Banca's healthy assets will be sold to Italian retail bank Intesa Sanpaolo, while their soured debts will be transferred to a specially created 'bad bank' for toxic assets likely never to be repaid to creditors, according to the emergency decree approved by the government in June.

The Italian state expects to recover 9.9 billion euros from a total of 17.8 billion euros of gross soured debts it is taking on under the plan.

"#Decree on Italy's banks and protection for savers, jobs and businesses approved," tweeted Italian premier Paolo Gentiloni.

"A difficult and necessary rescue finally achieved," Gentiloni's tweet added.

Italy's fragile banking system continues to cause deep concern among the 19-member eurozone. Last month, the EU anti-trust authority approved Italy's massive rescue of the country's troubled third-largest bank, Monte dei Paschi di Siena.



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