Economy Italy seeking to extend deadline to sell four rescued banks – source

Italy seeking to extend deadline to sell four rescued banks – source

Central bank of italy.
Central bank of italy.

Italy is negotiating with the European Commission to extend the deadline to sell four banks it bailed out late last year, a source at the Economy Ministry said on Wednesday.

The government ploughed 3.6 billion euros into Banca Etruria, Banca Marche, CariFe and CariChieti in November, using a fund financed by healthy banks to save them from collapse.

Italy promised the European Commission it would then sell the banks, but would like to extend the deadline for the sales to September from April.

“The European Commission initially indicated the end of April, but Italian authorities and the Commission are working to extend that deadline,” the Economy Ministry source said.

In the rescue package, four new banks were set up to take on the “good” assets from the troubled lenders, allowing them to continue to operate until a buyer or buyers can be found.

The impaired assets and operations were left in a “bad bank” put in the hands of liquidators.

The state-appointed liquidator of the only listed lender, Banca Etruria, is seeking 300 million euros ($335 million) from its former managers to compensate creditors and others who were damaged by their conduct, according to a letter sent to the managers and seen by Reuters.

Banca Etruria has been in the eye of a political storm because its vice president at the time was the father of one of Prime Minister Matteo Renzi’s closest allies, Constitutional Reforms Minister Maria Elena Boschi.

Boschi’s father, Pier Luigi, is among 35 former managers of the bank who are cited in the letter, including former presidents Giuseppe Fornasari and Lorenzo Rosi.

Rosi denied any wrongdoing. It was not immediately possible to obtain a comment from the others named in the letter or from their lawyers.

The Bank of Italy has already fined Fornasari, Rosi, Boschi and other managers for mismanagement and prosecutors in Arezzo, where the bank is based, have opened an investigation into possible criminal wrongdoing in the bank’s collapse.

The letter says if the former managers do not pay the 300 million euros within 30 days then the liquidator will take legal action to force them to.