Italian banks battered after bailout fund announced
MILAN (AP) — Investors in Italy have reacted with skepticism to the creation of a 5 billion-euro fund to bail out weak lenders.
The rescue fund, created by Italy's largest banks, insurers and institutional investors, was announced by the government on Monday night. Trading in small banks was volatile Tuesday, with many temporarily suspended from the markets during the day due to excessive losses.
Even market leaders Intesa SanPaolo, Unicredit and Ubi Banca, which are contributing hundreds of millions for the fund, closed down between 4 percent and 5 percent Tuesday, reflecting concerns about the plan to keep afloat weaker lenders.
The move was aimed at helping to stem a banking sector sell-off this year over concerns about 360 billion euros in nonperforming loans.