Italy’s strongest banks, insurers and asset managers have agreed to create a €5bn backstop fund to bail out weaker lenders in an effort to calm growing investor concern about the stability of the banking sector of the eurozone’s third-largest economy.
The rescue fund, announced by Prime Minister Matteo Renzi after a six-hour meeting of financiers, regulators and ministers in Rome, comes after a plunge in the value of Italian bank shares this year on widening concerns about the effect of €360bn of non-performing loans on Italy’s financial stability.
Dubbed “Atlas” after the mythological god who held up the sky, the fund will see UniCredit, Intesa Sanpaolo and UBI Banca, Italy’s strongest banks, handing over hundreds of millions of euros to create a backstop facility to bail out distressed smaller lenders.
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