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Financials

Italy denies report it is ready to defy Brussels to help its banks

ROME, July 4 (Reuters) - Italy has no plans to defy EU rules by pumping billions of euros of public money into its banks, and intends to fully respect EU rules, the spokesman for Prime Minister Matteo Renzi said on Monday, denying a report in the Financial Times.

“Italy has no intention of defying Brussels on the banks. We respect the rules and prefer market solutions for our banks,” said the spokesman.

The FT wrote on Monday that Italy was prepared to unilaterally pump billions of euros into its banking system if it comes under severe systemic distress despite warnings from Brussels and Berlin over the need to respect rules that make creditors, rather than taxpayers, fund bank rescues, citing several officials and bankers.

Italy’s banks are saddled with 360 billion euros ($399.71 billion) of bad loans and their share prices plunged after Britain opted to leave the EU in last month’s referendum.

Italy is in talks with the European Commission to devise a plan to recapitalise Italian lenders with public money limiting losses for bank investors, an EU executive spokeswoman said on Sunday. (Reporting by Gavin Jones)

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