Italy exploring options to support its banks if needed: source

ROME (Reuters) – Italy’s economy minister is studying possible measures to support the country’s banks if needed, a government source said on Monday, in a sign of concern within the ruling coalition over the impact on lenders of rising debt yields.

Italian banks, which hold about 375 billion euros ($426 billion) of Italian government bonds, have been hit by a jump in sovereign borrowing costs triggered by market fears over the coalition’s big-spending budget plans.

The source said Prime Minister Giuseppe Conte had asked Economy Minister Giovanni Tria to prepare possible measures for helping banks if needed.

The anti-establishment 5-Star movement, which governs with the right-wing League party, is opposed to using public money to strengthen the capital of ailing banks, the source said.

The source added that 5-Star is “open to providing guarantee schemes aimed at helping bank mergers”. It was not clear what kind of state guarantees the government might be considering and whether any such measure would be in line with EU state aid rules.

Italian daily Corriere della Sera reported on Monday that the government was ready to support domestic banks with loans, state guarantees and other measures, should the spread between Italian and German government bonds rose to unsustainable levels.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.