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LONDON, June 26 (Reuters) - Italy's bond yield spread over Germany widened on Monday after the European Commission approved a deal under which two struggling Veneto banks will be wound up.
Italy began winding up two failed regional banks on Sunday in a deal that could cost the state up to 17 billion euros ($19 billion) and will leave the lenders' good assets in the hands of the nation's biggest retail bank, Intesa Sanpaolo.
The yield on Italy's 10-year government debt rose 1.5 basis points in early trade on Monday to come off recent lows, while the yield spread over Germany widened 2 basis points to 168 basis points. (Reporting by Abhinav Ramnarayan, editing by Nigel Stephenson)