ROME: An Italian plan to set up a state-backed fund that would help troubled lenders by buying up bad loans and plug capital shortfalls should be ready by Monday, two sources close to the matter said on Thursday.
The government is anxious to end long-running concerns about the health of the Italian banking system, which is groaning under the weight of 360 billion euros ($410 billion) of bad loans — a third of the European total.
Sources told Reuters this week that Rome was looking to create a fund that would be majority owned by private investors to comply with EU rules on state aid. State lender Cassa Depositi e Prestiti (CDP) would also take part in the initiative, they said. A source said on Thursday that the government was in contact with the European Commission to make sure the new scheme complied with EU regulations.
