Ailing Italian banks to be saved by healthy peers

Italy on Monday launched a rescue plan for four ailing banks to be financed by their healthy peers.

The four banks -- Banca delle Marche, Banca Popolare dell'Etruria e del Lazio, Cassa di Risparmio di Ferrara and Cassa di Risparmio della Provincia di Chieti -- will receive 3.6 billion euros ($3.83 billion) under an emergency decree adopted by the cabinet.

The rescue, which got the green light on Sunday before being launched Monday, will be conducted by the Bank of Italy and use a newly-formed National Resolution Fund, which is fed by the country's healthy banks.

Four temporary bridge banks, or "bad banks", will be created, to which all non-performing assets and liabilities will be transferred, according to a government statement.

The ailing four, which were put under special administration over the past two years, have a combined market share of about one percent in Italy.

The rescue plan falls under recently-approved European rules drawn up to end bank bailouts which forced taxpayers to fork out hundreds of billions of euros during the financial crisis.

EU competition policy commissioner Margrethe Vestager said Sunday she welcomed the "decision to use the bank resolution tools for the first time in Italy, allowing these failing banks to be managed while preserving financial stability".