MILAN Oct 12 New European rules for dealing
with bank crises are having a negative impact on the sector and
not just in Italy, the director general of the Bank of Italy
said on Wednesday.
The new rules, which have been gradually introduced over the
past few years, state that investors in an ailing bank -
including retail bondholders and depositors with more of 100,000
euros - must be hit before any taxpayer money can be used to
prop up the lender.
Salvatore Rossi, in comments e-mailed to Reuters, said that
while it was right in principle to shield taxpayers, hitting
retail investors in bank "undermines confidence in the system
and ultimately the financial stability of the country and of the
whole euro zone."
He said the combined impact of the new rules, and the
European Commission's stance on state aid for struggling banks,
was "overall negative, and not just in Italy."
Italy, where tens of thousands of ordinary citizens have
invested their savings in banks' shares and bonds, is a vocal
critic of the new rules, which came into full force this year.
(Reporting by Stefano Bernabei, writing by Silvia Aloisi,
editing by Valentina Za)