July 12, 2018 / 9:22 AM / 8 months ago

Italy to change mutual bank reform shortly - deputy minister

ROME (Reuters) - Italy’s new government will change a reform made during the previous legislature that forces hundreds of small mutual banks to merge into two large groups, a deputy economy minister said on Thursday.

“It’s an issue the government has taken to heart,” Deputy Economy Minister Laura Castelli said on the sidelines of a conference in parliament. “We didn’t like the reform at all and it creates problems. We’re working to correct some parts of it.”

She gave no details as to how it would be changed, saying that it could be “adjusted” without blocking it completely. She added that it was “reasonable” to imagine that the government would act by July 20.

Bank of Italy Governor Ignazio Visco this week said the government should stick to the reform because it helped banks raise capital and avoid possible crises.

Last month, a prominent lawmaker from the governing coalition said the reform should be suspended because it punished domestic lenders.

Reporting by Giuseppe Fonte; Editing by Steve Scherer and Crispian Balmer

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