MILAN Jan 29 The scandal surrounding Banca
Monte dei Paschi di Siena is an isolated case and
there is no risk of contagion for the Italian banking system,
the chief executive of Italy's top retail bank Intesa Sanpaolo
said on Tuesday.
"It's an isolated case around which, for various reasons,
completely unfounded opinions have been formed," Enrico
Cucchiani told Il Corriere della Sera in an interview.
But Cucchiani said the banking system could be at risk if
the state aid pledged to the bank were not forthcoming.
"The truth is that the Monti bonds safeguard savers and the
real economy: if Monte Paschi got stuck then there'd be a
systemic risk," he said.
Monte Paschi, Italy's No. 3 lender, has run into difficulty
since its 9-billion-euro cash purchase of Banca Antonveneta in
2007 and has become embroiled in a derivatives-related scandal.
It is dependent on a 3.9-billion-euro package of state
support, offered through so-called Monti bonds, which was
cleared by the Bank of Italy on Sunday.
Cucchiani said derivatives and speculation were essential
for the functioning of the real economy.
"But medicine, like penicillin, can cure or, if abused, have
the opposite effect," he said.
(Reporting by Stephen Jewkes; Editing by Mark Potter)