ROME, May 18 (Reuters) - Italy will be able to guarantee bonds issued by domestic banks for an overall amount of up to 19 billion euros ($21 billion) to preserve financial stability, a draft government decree showed on Monday.
The measure will be in place for six months, and can be prolonged for another six, provided the European Commission approves the extension, the draft document said.
The state will also be able to provide a guarantee to boost the value of collateral put forward by Italian banks to borrow from the Bank of Italy in case of a severe liquidity crisis.
The scheme to guarantee bonds is part of a broader stimulus package announced last week and aimed at helping families and companies hit by the new coronavirus. ($1 = 0.9163 euros) (Reporting by Giuseppe Fonte, writing by Valentina Za)