ROME (Reuters) - The Italian government has asked the European Commission to extend by a further six months a guarantee scheme aimed at easing the disposal of bad loans, two government sources said on Wednesday.
The so-called GACS scheme, introduced at the beginning of 2016, was conceived to help the country’s banks offload their bad loans and had already been extended.
At the heart of the GACS programme is a state guarantee that protects buyers of the safest - or most senior - tranche in the securitisation. That lowers its risk to that of a government bond, cutting the securitisation vehicle’s financing costs.
Reporting by Giuseppe Fonte and Stefano Bernabei; writing by Francesca Landini