August 5, 2016 / 5:50 AM / 3 years ago

Bank of Italy head says can't rule out state aid for lenders

MILAN, Aug 5 (Reuters) - The possibility of public support for an Italian bank should not be ruled out and the depth of the economic crisis the country experienced would warrant such measures, Bank of Italy Governor Ignazio Visco told an Italian daily on Friday.

Over the past few weeks, Italy held talks with European Union competition authorities over the possibility of state aid for Monte dei Paschi di Siena, Italy’s third-largest lender.

The Tuscan bank unveiled on Friday a privately-funded five billion euro rescue plan as Rome failed to win a full suspension of so called ‘bail-in’ rules that require hitting investors in a troubled bank before tapping public money to prop it up.

“Regardless of Monte dei Paschi I say that, however remote, it is wise to be prepared for such a possibility [of state aid], though it does not mean it will be necessary,” Visco told Corriere della Sera daily. (Reporting by Valentina Za, editing by stephen Jewkes)

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