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EU BANK CRISIS RULES HAVING NEGATIVE IMPACT ON SECTOR-BOI
MILAN, Oct 12 (Reuters) - New European rules for dealingwith bank crises are having a negative impact on the sector andnot just in Italy, the director general of the Bank of Italysaid on Wednesday.
The new rules, which have been gradually introduced over thepast few years, state that investors in an ailing bank -including retail bondholders and depositors with more of 100,000euros - must be hit before any taxpayer money can be used toprop up the lender.
Salvatore Rossi, in comments e-mailed to Reuters, said thatwhile it was right in principle to shield taxpayers, hittingretail investors in bank 'undermines confidence in the systemand ultimately the financial stability of the country and of thewhole euro zone.'
He said the combined impact of the new rules, and theEuropean Commission's stance on state aid for struggling banks,was 'overall negative, and not just in Italy.'
Italy, where tens of thousands of ordinary citizens haveinvested their savings in banks' shares and bonds, is a vocalcritic of the new rules, which came into full force this year.