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EU's Vestager declines comment on Monte Paschi, works on compensation schemes
December 7, 2016 / 11:00 AM / a year ago

EU's Vestager declines comment on Monte Paschi, works on compensation schemes

BRUSSELS (Reuters) - The European Union antitrust commissioner declined on Wednesday to comment on plans by the Italian government to buy a controlling stake in Banca Monte dei Paschi di Siena (BMPS.MI), and said work is ongoing on schemes to compensate investors who were victims of mis-sellings.

European Commissioner for Violation of EU Treaties Margrethe Vestager reacts during a news conference on the approval of the Hutchison-Vimpelcom deal at the European Commission in Brussels, Belgium September 1, 2016. REUTERS/Eric Vidal

Asked whether a planned purchase of Monte Paschi’s junior bonds by the Italian state were in line with EU competition rules, she said: “I cannot comment on Monte Paschi di Siena in particular.”

Reuters exclusively reported on Tuesday that Italy is preparing to take a 2 billion euro ($2.1 billion) controlling stake in Monte dei Paschi as the bank’s hopes of a private funding rescue fade following Prime Minister Matteo Renzi’s decision to quit.

“I can say in general you can find that there are a number of tools available for national authorities if a bank has issues,” she told a news conference in Brussels.

“One of the things that we are working with is tools to enable governments to compensate for mis-selling of different kinds,” she said.

After the EU introduced bail-in rules this year, which impose losses on bank creditors in case of a lender’s failure, some investors have claimed they were mis-sold bank instruments without being aware of the risks.

“It is something we have set up before. We will work with governments again if they want to set up schemes that can allow citizens to be compensated if mis-selling has been taking place,” she concluded.

Reporting by Francesco Guarascio; editing by Philip Blenkinsop

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