Italian Banks Ready To Avert Another Carige Funding Failure: Sources

www.oann.com | 4/16/2016 | Staff
MILAN (Reuters) – Italian banks are set to fund the bulk of a 900 million euro ($1.01 billion) rescue plan for troubled regional lender Carige in a last-ditch attempt to avert liquidation, three sources close to the matter said.

Weakened by decades of mismanagement, Carige risks collapse as a result of bad loans accumulated during a deep recession that followed the global financial crisis a decade ago.

January - Central - Bank - Bank - Administration

In January, the European Central Bank placed the Genoa-based bank under special administration and told it to find a buyer.

After at least two bailout plans fell through, the ECB has given Carige until July 25 to come up with a solution. A source with knowledge of the matter said its administrators were working to meet that deadline.

Rescue - Plan - Depositor - Protection - Fund

Under the latest rescue plan, a depositor protection fund (FITD) financed by Italian banks would inject some 520 million euros including by converting into equity a 320 millions euro bond bought from the bank last year, according to the sources.

The sources said Cassa Centrale Banca, an unlisted cooperative bank based in northern Trentino region, could provide some 80 million euros, while two state-owned banks, Credito Sportivo and Mediocredito Centrale, could help by underwriting up to 200 million euros in convertible bonds.

Source

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