Italy economy minister says EU's bank bail-in rules should be scrapped

Italy economy minister says EU's bank bail-in rules should be scrapped
FILE PHOTO: Italian Economy Minister Giovanni Tria attends a final vote on Italy's 2019 budget law at the Lower House of the Parliament in Rome, Italy, December 29, 2018. REUTERS/Remo Casilli   -  Copyright  Remo Casilli(Reuters)
By Reuters

ROME (Reuters) – Italian Economy Minister Giovanni Tria said on Wednesday that European Union “bail-in” rules covering failing banks should be scrapped.

Tria told parliament he agreed with comments by Antonio Patuelli, the head of Italy’s banking lobby, who earlier in the day said the rules should be abolished because they hurt the confidence of savers, and in any case had never been applied in Italy.

Designed after the global financial crisis to shield taxpayers from costly bank bailouts, bail-in rules required investors in a bank to bear losses before public funds can be tapped.

“Of course I share the opinion of Patuelli,” Tria told a Senate panel.

He added that when the rules were introduced Italy’s economy minister had been “practically blackmailed” by his German counterpart and feared if he had not accepted them it would have sent a message that Italy’s banks were close to collapse.

Tria’s office later issued a statement saying he regretted his “unfortunate” remark regarding blackmail.

He said he had merely meant to describe an “objective situation” in which an Italian refusal to adopt the bail-in rules could have been interpreted as a sign that its banking system was in difficulty.

“The minister did not intend to make a specific accusation either against Germany or against the German finance minister of the time,” the statement said.

(Reporting by Giuseppe Fonte; Writing by Gavin Jones; Editing by Steve Scherer and Alison Williams)

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