MILAN A failure to find a solution to a crisis gripping Italy's Veneto-based banks would result in consequences similar in impact to a default by Greece, the head of one of the banks was quoted as saying on Friday.
Banca Popolare di Vicenza and Veneto Banca have requested a state bailout to help fill a combined capital shortfall of 6.4 billion euros ($7.2 billion).
However, sources have said the EU Commission has demanded an additional injection of 1.2 billion euros by private investors before taxpayer money can be used and Rome is struggling to find any investor willing to stump up the money.
"The effects of not solving the crisis at the two banks would not be smaller than those created by a default by Greece," CEO Fabrizio Viola said in an interview with daily Corriere della Sera.
He added that the time taken to find a solution to rescue the banks was being drawn out in an "unsustainable way".
Viola added that the effects should not be underestimated given that the two lenders have extended loans worth 30 billion euros, mainly in the industrial north eastern regions of the country, and "calling them back would create tremendous chaos".
But he also said that the situation at the two banks is "under control both regarding risks and required capital".
(Reporting by Giulia Segreti; Editing by Edwina Gibbs)