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Italy's Lombardy region to challenge government's bank reform
May 14, 2015 / 5:07 PM / 2 years ago

Italy's Lombardy region to challenge government's bank reform

MILAN, May 14 (Reuters) - The local government of Italy’s northern Lombardy region is challenging the recently approved reform of the country’s cooperative banks, saying it is anti-constitutional.

Prime Minister Matteo Renzi’s government in March approved a reform that aims to convert the country’s 10 largest cooperative banks into joint stock companies, a measure that is expected to spur mergers in the sector.

Massimo Garavaglia, head of economic affairs at the regional government, said Lombardy asked its lawyers on Thursday to present a legal challenge against the reform with Italy’s constitutional court.

“The reform will complicate ... access to credit, especially for smaller businesses, which cooperative banks have supported during the economic crisis,” he told Reuters.

Most of the 10 banks affected by the reform are based in Lombardy, Italy’s economic powerhouse.

Renzi has hailed the reform as a stride towards improving governance and efficiency at Italy’s top cooperative banks, which include UBI Banca, Banco Popolare and Banca Popolare di Milano.

Were the court to strike down the reform, it would deal a serious blow to Renzi’s reform agenda.

Reporting by Elisa Anzolin and Giulio Piovaccari, writing by Agnieszka Flak, editing by Steve Scherer and David Evans

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