June 30, 2016 / 3:42 PM / 4 years ago

EU authorises Italian guarantee scheme for solvent banks - spokeswoman

BRUSSELS, June 30 (Reuters) - The European Commission has authorised a six-month Italian guarantee scheme to provide liquidity to solvent banks in case of need, an EU executive spokeswoman said on Thursday.

Italy asked for a precautionary activation of the scheme, although the Commission said “there is no expectation that the need to use this scheme should arise.” The measure will be valid until the end of the year.

Similar guarantee schemes have been used by several EU member states. The Commission said the Italian scheme complies with EU state aid rules.

Rome has said it is concerned that Italian banks, which hold 360 billion euros ($400 billion) of bad loans, a third of the euro zone’s total, risk attack by hedge funds betting that market turmoil, increased by the 23 June Brexit vote, could tip them into a full-blown crisis. (Reporting by Francesco Guarascio; editing by Foo Yun Chee)

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