(26 June 2015 – Italy) Italy’s government has passed rules to help banks strengthen their capital and boost profit as part of its plans to align banking practices with those of other European countries.
Prime Minister Matteo Renzi’s cabinet approved a decree law to shorten the time it takes banks to seize assets on bad loans, while allowing lenders to deduct loan losses from their tax bill in a single year instead of over five.
The government has introduced sweeping reforms of the nation’s cooperative lenders that will probably prompt a wave of mergers.
Italy is also studying a proposal to create a so-called bad bank to allow lenders to offload troubled assets as low interest rates maintain pressure on banks’ profit even as the economy emerges from recession.