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EU supports Italy's plan to compensate savers for unsuitable bonds
December 14, 2015 / 12:02 PM / 2 years ago

EU supports Italy's plan to compensate savers for unsuitable bonds

BRUSSELS, Dec 14 (Reuters) - The European Commission said on Monday it supported Italian government plans to compensate retail investors who may have been sold unsuitable bonds in four banks and then lost money when the lenders were rescued.

“We of course support the Italian government intentions, which will enable savers to claim compensation from the banks for any potential misselling of bonds,” a Commission spokesman told a news briefing.

The Italian government is proposing setting up a 100-million-euro ($110-million) fund to compensate at least some of the 10,500 retail bond holders who lost money in the rescue of Banca Marche, Banca Etruria, CariChieti and CariFe at the end of November.

Shareholders and junior bond holders were forced to pay for the rescue of the four lenders. It was the first time since the 1930s that bond holders had suffered losses in a banking crisis.

The suicide of a pensioner, who lost 110,000 euros in the rescue, has added to the outcry, raising questions about whether the four banks - some of which were placed under special administration more than two years ago - had been warning customers clearly about the risks of buying their bonds. (Reporting by Francesco Guarascio; editing by Philip Blenkinsop and Estelle Shirbon)

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