September 20, 2018 / 4:00 PM / 3 months ago

Italy parliament approves decree delaying reform of small banks

ROME, Sept 20 (Reuters) - Italy’s parliament on Thursday gave its final approval to a decree that delays a reform of small banks, slowing an overhaul planned by the former centre-left administration that was backed by the European Central Bank.

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 it 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 Angelo Amante, writing by Giselda Vagnoni; editing by David Evans

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