Italy winds up 2 regional banks; deal could cost up to 17b euros

Rome

ITALY began winding up two stricken Veneto-based banks on Sunday in a deal that will see their good assets transferred to Intesa Sanpaolo and could cost the state up to 17 billion euros ($26.4 billion).

The government will pay 5.2 billion euros to Intesa, Italy's top retail bank, to take on Popolare di Vicenza and Veneto Banca's best parts. But Economy Minister Pier Carlo Padoan said that the total funds "mobilised" by the state would be for up to 17 billion euros - three times more than what had initially been estimated to recapitalise the banks with public money.