ROME, July 3 (Reuters) - Italy’s cabinet has approved new rules on propping up failed banks, decreed by the European Union after the 2008 financial crisis, aimed at shielding taxpayers from the risk of having to bail out troubled lenders.
The European Commission in late May gave Italy, France and nine other EU countries two months to adopt the rules, which were meant to be applied by the end of 2014, or face legal action.
The so-called bank recovery and resolution directive (BRRD) imposes losses on shareholders and creditors of ailing lenders, in a process known as “bail-in”, before any taxpayers’ money can be tapped in a bank rescue.
The lower house of Italy’s parliament definitively approved the mechanism with 270 votes in favour, 113 against and 22 abstentions. (Reporting by Giuseppe Fonte; Writing by Isla Binnie; Editing by David Holmes)