Italy bank rescue marred by suicide and lost savings

Image source, AFP
Image caption,
Many savers were at risk before the government stepped in last month

Italian Prime Minister Matteo Renzi has defended his government's rescue of four Italian banks - but voiced sadness over an elderly investor's suicide.

A pensioner in Civitavecchia, near Rome, hanged himself after his €100,000 (£72,000; $110,000) investment in Banca Etruria was wiped out.

Mr Renzi said the €4bn rescue last month had to be done, otherwise thousands of jobs would have been lost.

About 130,000 bank shareholders and bondholders lost their investments.

The pensioner left a suicide note criticising his bank.

Besides Banca Etruria, the other affected banks were: Cassa di Risparmio di Ferrara, Banca delle Marche and CariChieti.

The rescue was financed by three big banks - Unicredit, Intesa SanPaolo and Ubi Banca.

"The Italian government intervened when it saw that four banks risked closing and losing thousands of jobs and deposits," Mr Renzi said.

The centre-left prime minister added that the government "is working to find solutions" to help the investors who had lost money in the rescue.

But the scope for such solutions is limited because of European Commission rules against state aid.

He said the government "expresses its own pain and condolences to the family" of the pensioner.

'State suicide'

The rescue was a "bail-in" - meaning bondholders suffered losses - unlike the hugely unpopular bank bailouts during the 2008 financial crisis, which cost ordinary EU taxpayers tens of billions of euros.

Image source, AP
Image caption,
Italy's PM Matteo Renzi is struggling to get key economic reforms adopted

Mr Renzi's rescue initiative drew fierce criticism in Italy.

The leader of the far-right opposition Northern League, Matteo Salvini, called the pensioner's death "state suicide", in a tweet.

"A pensioner kills himself because he lost his life savings due to Banca Etruria and the absent government. State suicide," his tweet said.

Correspondents say Mr Renzi acted quickly because in January, the EU is tightening the rules on bank rescues - they will force losses on depositors holding more than €100,000, as well as bank shareholders and bondholders.

Central bank supervisor Carmelo Barbagallo, quoted by Reuters news agency, said letting the four banks fail under those new EU rules next year would have meant "sacrificing the money of one million savers and the jobs of nearly 6,000 people".

Mr Renzi said he supported a parliament decision to investigate "what has happened in the Italian and European banking systems in the last few years". He called for "every effort" to "clarify the responsibilities of the past".