ECB closes 2 Ital­ian banks

Banking Frontiers - - Regulator -

The Euro­pean Cen­tral Bank has told two small Ital­ian banks to wind up. It said in a state­ment Veneto Banca and Banca Popo­lare di Vi­cenza, both based in north­ern Italy, had failed or were likely to fail be­cause they did not have enough cap­i­tal to meet reg­u­la­tory re­quire­ments. Th­ese two banks have be­come the sec­ond and third banks to be de­clared ef­fec­tively dead by the cen­tral bank, which has pow­ers to su­per­vise euro­zone banks. Ear­lier, it had closed Spain’s Banco Pop­u­lar, which was that coun­try’s fifth largest bank. An­a­lysts said share­hold­ers of the two Ital­ian banks will lose their money, as will in­vestors in so-called ju­nior bonds that are in­tended to ab­sorb losses first. How­ever, de­posits in the bank will be pro­tected, as will in­vestors in so-called se­nior bonds.

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