MILAN (AP) — Temporary administrators were appointed to lead Italy’s 10th largest lender, the struggling Carige, as part of a plan to avoid yet another bank bailout in the country.
The decision to appoint administrators was taken by the European Central Bank, which regulates banking in the eurozone. It followed the resignation of the bank’s board majority after a failed capital-raising exercise. Italy’s market regulator suspended trading in the bank’s shares for the day.
Carige, which is based in the port city of Genoa, failed to win shareholder support to raise 400 million euros ($457 million) last month as part of a plan to steady the bank. Six small, regional banks have had to be rescued in recent years, with ordinary savers losing billions of euros.
The ECB named three temporary administrators “tasked with safeguarding the stability” of the bank and said the move was “an early intervention measure aimed at ensuring continuity and pursuing the objectives of the strategic plan.” The administrators include the bank’s chairman, Pietro Modiano, and CEO Fabio Innocenzi.
Italy’s Interbank Fund for Safeguarding Savings (FITD) said a merger would be necessary to pull Carige out of its crisis.