The European Commission asked Italy for clarification on legislation passed last year that changes the Bank of Italy’s capital structure, as it seeks assurances the new rules don’t amount to state aid to banks.
Ireland, home to one of the world’s biggest banking implosions, is now the scene of a skirmish between lenders and regulators that offers a warning to the European Central Bank as it conducts its own probe into the region’s balance sheets.
Pier Carlo Padoan, chief economist at the Organization for Economic Cooperation and Development, was selected to be Italy’s finance minister as Prime Minister- designate Matteo Renzi named his government team.
The euro-area economy expanded more than forecast in the final quarter of 2013, led by Germany and France, easing pressure on the European Central Bank to take action next month to counter low inflation and spur growth.
Banca Popolare dell’Emilia Romagna SC may face a capital shortfall of as much as 300 million euros ($409 million) in the European Central Bank’s asset quality review, though Italy’s No. 6 lender rules out a share sale.
Italian banks, which have raised money, sold assets and cut costs to boost capital, may face a shortfall of as much as 15 billion euros ($20 billion) as regulators scrutinize their balance sheets this year.