May 10, 2020 / 1:42 PM / 17 days ago

Italy might guarantee up to 15 billion euros of bank bonds: draft decree

ROME (Reuters) - Italy’s government is considering providing state guarantees for up to 15 billion euros ($16.26 billion) of bonds issued by the country’s banks, a draft decree obtained by Reuters showed on Sunday.

The document says the move is aimed at “preserving financial stability” in the euro zone’s third-largest economy, which is facing its worst recession since World War II as a result of the coronavirus outbreak and measures to halt it.

It would allow the economy ministry to offer support to Italian banks for a period of six months — which can be extended for a further six months if needed — although it will need a preliminary green light from the European Commission.

The scheme to guarantee bonds is part of a broader stimulus package which is expected to be approved by the government in Rome in the next few days.

($1 = 0.9225 euros)

Reporting by Giuseppe Fonte; Editing by Catherine Evans

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