July 23, 2018 / 1:41 PM / 10 months ago

Bank of Italy following closely Carige's situation

MILAN (Reuters) - The Bank of Italy is following closely developments at Banca Carige (CRGI.MI), the central bank’s head of supervision said, after the Italian bank was told to boost capital or embark on a merger.

“Attention is high as it is normal that it should be,” Carmelo Barbagallo told reporters on the sideline of an event when asked about Carige.

Carige, Italy’s last remaining large problem bank, is facing a management crisis after its chairman, deputy chairman and two board members resigned in disagreement over the leadership of Chief Executive Paolo Fiorentino.

Carige said on Sunday the European Central Bank had rejected the bank’s latest capital plan and had asked for new measures by Nov. 30 that would allow the lender to comply with mandatory capital levels by Dec. 30.

The ECB could push back that deadline, “if a merger were pursued to ensure that capital requirements are met on a sustainable basis,” the bank said, quoting a letter received on Friday from the regulator.

Reporting by Andrea Mandala, writing by Valentina Za, editing by Francesca Landini

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