Advertisement

Italian finmin sees no link between EU bank stocks fall and bail-in rules

By Francesco Guarascio

BRUSSELS (Reuters) - There is no connection between the sharp fall in European banking stocks and new EU rules which expose banks' creditors to more risks, Italy's finance minister said on Thursday, as he called for a gradual introduction of the new legislation.

New EU rules on the so-called bail-in of banks' creditors took effect on Jan. 1, meaning bank shareholders, bondholders and large depositors would be liable if a bank were to go bust.

European bank shares have lost nearly a quarter of their value since the beginning of the year, with slumping oil prices, soaring technology costs, a slowdown in China among a slew of factors making investors jittery about banks.

"I don't see this connection," Italian Finance Minister Pier Carlo Padoan told reporters, replying to a question on whether the introduction of the new rules was linked to the collapse of banking shares in Europe.

"It is obvious that the bail-in is a new regime that will need to be introduced softly and with the necessary gradualness," Padoan told reporters in Brussels.

He underlined that Italy does not want the bail-in legislation to be changed, but did not provide further details on how he thinks the new rules should be applied.

Bail-in rules were agreed at the end of 2013 after lengthy negotiations during the 2009-2012 euro zone debt and banking crisis that prompted governments to use billions of euros of taxpayers' money to rescue failing lenders.

The bail-in legislation is aimed at reducing and possibly avoiding taxpayers' losses in case of new bank bailouts. Italy has been critical of the plans.

(Editing by Hugh Lawson)