June 8, 2017 / 9:29 AM / 2 months ago

Wind-down of Veneto banks would cost other lenders 11 billion euros: sources

2 Min Read

MILAN (Reuters) - Healthy Italian banks would have to shell out 11 billion euros ($12.4 billion) to protect depositors at Veneto Banca and Popolare di Vicenza if the two ailing regional banks were to be wound down, two sources familiar with the matter said on Thursday.

The two banks held 24 billion euros in current accounts and term deposits at the end of last year. Under Italian law, deposits up to 100,000 euros each are guaranteed by a depositors' protection fund which is financed by healthy lenders.

If the two Veneto-based banks were to be wound down, domestic rivals would have to replenish that fund.

Italy's government is trying to convince the country's banks, starting with heavyweights Intesa Sanpaolo (ISP.MI) and UniCredit (CRDI.MI), to help rescue the Veneto-based lenders. EU authorities are demanding private investors stump up 1.2 billion euros in capital before they will authorize a state rescue.

One source said UniCredit CEO Jean Pierre Mustier was actively involved in the rescue and had held talks with both the Rome government and European authorities.

Reporting by Paola Arosio; Writing by Valentina Za; Editing by Mark Bendeich

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