The Milan stock exchange's FTSE
Mib index was 1.5% down at the midway point of trading on
Thursday with stocks in several banks taking another pounding.
Bank shares were down by an average of 2%, with UBI Banca
the biggest loser after it shed over 4%.
On Wednesday a government decree with measures aimed at
encouraging consolidation in a banking system that many experts
consider too fragmented won final approval in parliament.
The new law contains a reform of Italy's multitude of
cooperative credit banks (BCCs) as well as measures on
State-backed securitization guarantees of non-performing loans
(NPLs).
Premier Matteo Renzi's government recently had to take
action to save four small lenders - including one in which
Reform Minister Maria Elena Boschi's father was a vice
president.
But the rescue left many investors with worthless shares
and bonds in those banks, leading to a huge furore and
no-confidence motions that the executive had to fend off.
Anti-corruption agency ANAC has been tasked with holding
the arbitration in the cases of small investors in Banca
Etruria, Banca delle Marche, Cassa di Risparmio della Provincia
di Chieti (CariChieti) and Cassa di Risparmio di Ferrara
(CariFe).
Many investors said they were deceived by the banks about
the risks entailed in buying bonds in them.
One of Banca Etruria's former bondholders committed suicide
after his life savings went up in smoke.
But ANAC President Raffele Cantone said Thursday that
arbitration may not be necessary.
"The decree for the compensation is on hold because they
(the government) are talking to Europe to see if it's possible
to widen the range of the compensation in order to avoid
arbitration, which would be better for us," Cantone said.
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