off-the-wire

UPDATE 2-Credit Suisse impact on Italian banking system "insignificant" - minister

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds comments from sources on negligible exposure to CS at Italy's top banks, insurers) MILAN, March 20 (Reuters) - The impact of the Credit Suisse crisis on the Italian banking system is "insignificant", Economy Minister Giancarlo Giorgetti said on Monday. Giorgetti also expressed surprise at the Swiss authorities' decision to give priority to Credit Suisse shareholders over bondholders in its rescue merger with UBS . "I repeat and we believe that the repercussions on the Italian banking system are insignificant," he told reporters on the sidelines of an event in Milan. Top Italian insurers Generali and Unipol , as well as leading lenders Intesa Sanpaolo , UniCredit , Banco BPM , BPER , Monte dei Paschi and Mediobanca have zero or close to zero exposure to Credit Suisse's hybrid bonds which are being written off under the rescue deal, sources close to the matter said.


Some of the world's largest central banks came together on Sunday to try to stop a banking crisis from spreading as Swiss authorities persuaded UBS Group to buy rival Credit Suisse for $3.23 billion and assume up to $5.4 billion in losses in a historic deal. The Swiss regulator said the decision to write down to zero the Additional Tier 1 bonds, which can be converted into equity or written off if a bank's capital level falls below a certain threshold, would bolster the bank's capital.


In other remarks, Giorgetti said that interest rate hikes by central banks must be "calibrated" to avoid hurting financial stability. "It seems to me that the markets have calmed down a bit now, I think the situation in Europe is under control", he added.
($1 = 0.9289 Swiss francs) (Reporting by Elvira Pollina, writing by Federico Maccioni, editing by Keith Weir and Gavin Jones)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.