Italy asks pension funds to invest 500 mln euros in bank rescue fund - source

ROME/MILAN, July 25 (Reuters) - The Italian government has asked a series of specialist pension funds to invest 500 million euros ($549 million) in the new fund the country is trying to set up to buy bad loans, a source close to the matter said on Monday.

The source said the Atlante 2 fund would only invest in non-performing loans and would not buy into bank equity.

Rome is looking for ways to support struggling lenders without breaking European Union state aid rules that require investors to take a hit first to shield taxpayers.

AdEPP, the association of sector-specific pension funds, said on Monday it urged its members to invest in Atlante 2, but added that its members would individually make decisions.

$1 = 0.9104 euros Reporting by Stefano Bernabei and Stephen Jewkes