MILAN May 23 Italian bank Mediobanca
said on Friday it would proceed to cancel 1 billion euros ($1.4
billion) in state-backed bonds that it had issued at the height
of the euro zone crisis in a further sign that the funding
situation at Italian banks is improving.
At the peak of the crisis, Italy had offered to guarantee
bank bonds so that lenders could use them as collateral to
borrow from the European Central Bank at two extraordinary
liquidity tenders in late 2011 and early 2012.
As market tensions eased Italian banks have returned to
borrow from international investors and have been repaying
longer-term ECB funds ahead of the maturity of the two
UniCredit, Italy's biggest bank, said earlier this
week it had cancelled similar state-backed bonds worth 10.1
($1 = 0.7323 Euros)
(Reporting by Lisa Jucca)