September 13, 2018 / 12:24 PM / 2 months ago

Italy govt wins confidence vote on decree that delays small-banks reform

ROME, Sept 13 (Reuters) - Italy’s government on Thursday won a confidence vote on a decree that delays a reform of small banks, slowing an overhaul planned by the former centre-left administration and backed by the European Central Bank.

Some 329 lawmakers in the lower house of parliament voted in favour, while 220 voted against. The confidence vote was called in order to accelerate the passage of the decree, which must be transformed into law within 60 days.

The decree is expected to be approved by the lower house on Friday before moving to the upper house Senate for final approval later this month.

The reform of cooperative (BCC) and mutual banks is aimed at forcing mergers among small lenders in a bid to strengthen Italy’s financial stability.

But the overhaul will take longer than initially planned and will give more powers to small banks within merged entities under the measures adopted by Italy’s new anti-establishment coalition.

Cooperative banks (BCCs) will get three additional months, giving them in all six months, to meet a deadline to agree on complying with the measure and merging with other banks.

The extended period to comply with the new rules will kick in after supervisors authorise the new holdings under which nearly 300 BCCs will merge.

Two Italian mutual banks, Popolare Bari and Popolare Sondrio, will also have to turn into joint stocks companies by Dec. 31. This measure postpones a deadline that expired in May. (Reporting by Giuseppe Fonte, writing by Giselda Vagnoni, editing by Crispian Balmer)

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