BUCHAREST (Reuters) – The Italian government and the European Commission have reached a provisional agreement to reimburse some investors who bought shares in failed banks, an Italian official said, in an unprecedented move that would soften EU rules on bank rescues.
The bail-in rules devised after the last decade’s financial crisis were designed to make any given bank and its creditors – instead of taxpayers – financially responsible if it went bust, with shareholders first in line to pay up.
Regulations - Force - Shareholders - Bank - Collapses
Since the regulations came into force in 2016, shareholders have been all but wiped out in all bank collapses, including Banca Monte dei Paschi di Siena and two smaller north-eastern banks that Italian authorities intervened to save in 2017.
Losses have also been inflicted on bondholders in some cases, while depositors have always been spared.
Deal - Brussels - Rome - Bondholders - Shareholders
But under the new provisional deal between Brussels and Rome, bondholders and shareholders of failed Italian banks could claim their money back, the official from the Italian finance ministry said.
“The Commission is in constructive contact with Italy on the proposed measures,” the EU commissioner for financial services Valdis Dombrovskis said, declining to comment further.
Agreement - Shareholders - Incomes
Under the agreement, shareholders with annual incomes...
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