Italy rushes to save two failed banks

milan — Italy is rushing to approve emergency rules outlining liquidation procedures for two failed banks in the northern Veneto region in time for them to open today.

The government was set on Sunday to approve a decree law setting up rules that would let Intesa Sanpaolo buy some assets of Banca Popolare di Vicenza and Veneto Banca at a token price and determine the state intervention needed to avoid losses for senior bondholders.

The European Central Bank on Friday declared the lenders failing or likely to fail, and said both would be wound up under Italian insolvency rules.

A local regulatory framework is needed before the banks can open for business today, as the government wants to smooth the sale of the stricken lenders’ assets. Italy may include changes to its bankruptcy law in the decree it’s readying, according to the Italian newspaper La Stampa.— Bloomberg