January 19, 2017 / 12:10 PM / 2 years ago

EU clears state guarantee for Popolare Vicenza, Veneto Banca debt

A logo of Banca Popolare di Vicenza is seen in downtown Milan, September 29, 2015. REUTES/Stefano Rellandini/File Photo

MILAN (Reuters) - The European Commission has approved measures for Italy to provide a state guarantee on bond issues at Popolare di Vicenza and Veneto Banca, two regional lenders that were rescued last year by banking industry bailout fund Atlante.

The two banks have been told by the European Central Bank to improve their liquidity position. To help weak lenders, Italy passed in late December a decree to allow banks to tap a state guarantee on their debt.

“The European Commission has found Italian plans to support the access to liquidity of Banca Popolare di Vicenza and Veneto Banca with a state guarantee to be in line with EU state aid rules,” the Commission said, adding the measure was “targeted, proportionate and limited in time and scope.”

Italy is set to provide a similar guarantee to debt issues by Monte dei Paschi di Siena (BMPS.MI).

Reporting by Valentina Za

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