Italian banking system is robust, says Economy Minister Tremonti

Oct 9, 2008, 9:31 GMT

Rome - Italy's banking sector is 'less sophisticated' than in other European nations and hence more 'robust' in dealing with the current financial crisis, Italian Economy Minister Giulio Tremonti said Thursday.

He was adressing parliament on measures approved Wednesday by Prime Minister Silvio Berlusconi's government to restore confidence in the country's banks.

Besides an existing provision guaranteeing bank deposits of up to 103,000 euros (140,000 dollars), the state would assist banks that risked failure because of an inability to raise capital on the market, Tremonti indicated.

'Banking interventions will be on a case-by-case basis,' Tremonti told parliamentarians. 'That's why we didn't give any numbers for the amount of possible interventions. We will do what is enough.'

On Wednesday, Italian media had reported the government intended to set up a rescue fund of 20 billion euros for the country's banking industry - a move similar to the British government's 50-billion- pound (87-billion-dollar) rescue package for leading banks in Britain.

Tremonti said that any eventual aid to the banks would be in line with Italy's European Union commitments to keep the budget deficit below the bloc's limit of 3 per cent of gross domestic product.

He also said measures were aimed as a last resort to 'safeguard the taxpayer' whose capital was deposted in bank accounts, 'not as support to those executives who made management errors.'