November 5, 2018 / 3:33 PM / 9 months ago

Italy's Di Maio says ready to do more for out-of-pocket bank investors

ROME, Nov 5 (Reuters) - Italy’s government is ready to boost compensation for savers who lost money in recent bank failures, Deputy Prime Minister Luigi Di Maio said on Monday, following an outcry over planned curbs on indemnities.

The 2019 budget set a limit on any reimbursement at 30 percent of total loses, angering groups representing thousands of small investors who said the cap meant coalition parties were reneging on their electoral campaign pledges.

In addition, the budget said only savers who had a legal ruling acknowledging they had been mis-sold investments would be entitled to any financial redress.

The coalition, which comprises the far-right League and anti-establishment 5-Star Movement, has earmarked 1.5 billion euros ($1.7 billion) to partially compensate out-of-pocket savers, with the payments to be spread out over three years.

“I guarantee the commitments we have undertaken,” 5-Star leader Luigi Di Maio told reporters during a trip to China.

“If we want to further extend the compensation criteria, we can do it,” he added.

5-Star promised in its election manifesto this year that if it won power it would reimburse savers who had been mis-sold investment products by the failed banks.

But investor groups, such as the Victims of Banking Bailout, said the government terms were too restrictive.

“They took a lot of votes promising that they would give everyone, without distinction, the entire amount of their lost investment,” the group wrote on Facebook, adding that the latest proposals were “harmful and disheartening”.

Victims of Banking Bailout was set up after the then-centre-left government rescued four small lenders in 2015, in a move that forced shareholders and junior bondholders to incur losses, while senior bondholders and depositors were spared.

Investors faced further losses in 2017 when two banks in Italy’s Veneto region also needed bailing out.

In the run-up to March national elections, the 5-Star used the issue to harangue the ruling centre-left Democratic Party (PD), accusing it of doing more to help bankers than small investors. The PD was swept from power in the vote.

Di Maio said he would be happy to meet investor representatives when he returned from China later this week.

“Those people are uppermost in my mind. It is social justice to compensate them for what they have lost,” he said. ($1 = 0.8780 euros) (Reporting by Stefano Bernabei; Writing by Crispian Balmer, editing by Ed Osmond)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below