Bank of Italy says it asked for ban on subordinate bonds

(ANSA) - Rome, December 11 - Bank of Italy (BoI) Senior Deputy Governor Salvatore Rossi on Friday said the central bank called for a ban on the sale of subordinate bonds to private individuals, commenting in the wake of the government's November decree to save four struggling banks in which a reported more than 100,000 account holders who had purchased such bonds lost money.
    "The truth is that Bank of Italy Governor Ignazio Visco, before all this came out, asked to prohibit the sale of subordinated bonds to bank branches, so that only institutional investors could buy them and not simple depositors," Rossi said in an interview with Italian daily Corriere della Sera.
    "We can't ban the sale of this or that product. We don't have such ample powers. And I remind you that supervision of investor solicitation is the job of another authority," Rossi said.
    "I'd like to avoid the usual Italy-against-Europe game, but it's undeniable that there was a difference of views between Italian authorities - the government first of all but also us - and Brussels, or rather the Directorate General and the competition (authority), and that is what pushed us to follow the now-criticised road that brought about the saving of Banca (Banca) Marche, CariFe, CariChieti and (Banca) Etruria," Rossi said.
    "The results of supervisory activity must be measured across the entire system. In these past seven years, first of financial crisis, then of sovereign debt and economic crisis, the number and size of bank crises in Italy have been a fraction of those in Spain, Germany, France and the Netherlands".
    The subordinate bonds sold by the four banks - prompting one to commit suicide after losing his life savings - are regarded as high-risk financial products that should normally go to savvy institutional investors and not to inexperienced small savers looking for safe instruments to place their money in.