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00:00:01
>> It could cost up to 17 billion euros and the bill is going to land on the doorstep of Italian taxpayers. Italy has begun winding up two of its regional banks, Banca Popolare di Vicenza and Veneto Banca. They collapsed after years of mismanagement and poor lending. Rome's emergency decree at the weekend may hit the Italian public but it looks like a good deal for the country's biggest retail bank.
00:00:25
Intesa Sanpaolo said last week it would buy the two banks' good assets for a single symbolic euro. And as Reuters chief financial correspondent Silvia Aloisi explains, they're even getting paid by the Italian government to do so.>> The Italian government ends up paying 5.2 billion euros to Intesa San Paolo, to basically allow it to cherry pick the best assets of these two banks.
00:00:52
Also, they're offering guarantees to Intesa for up to 12 billion euros. The total exposure for the Italian state is up to 17 billion euros to liquidate these two banks.>> The European Commission has approved the deal, despite frustration on the continent that it flouts EU banking rules.>> It's clear that there's been quite a lot of exasperation in some European countries with the way Italy has been allowed to basically take advantage of exceptions to the rules and use a lot of taxpayer money to wind down these banks.
00:01:29
>>
FOREIGN]
> Prime Minister Paolo Gentiloni calling on parliament to pass the decree into law. His government said the deal was necessary and there was no better alternative. But this option potentially costly for taxpayers and the bad news may not end there. Intesa's good assets acquisition could lead to the closure of 600 branches and the departure, on a voluntary basis the bank said, of around 3,900 staff.