Italy Gov’t Delays Reform of Small Banks

Italy’s government agreed on Tuesday to delay a reform of small banks, slowing an overhaul planned by the former center-left government and backed by the European Central Bank, Reuters reported. The reform of cooperative and mutual banks is aimed at forcing mergers among small lenders in a bid to strengthen Italy’s financial stability. But the overhaul will take longer than initially planned and will give more powers to small banks within merged entities under the measures adopted by Italy’s anti-establishment executive. “We reformed the reform,” Italy’s Prime Minister Giuseppe Conte told a news conference. He said banks were given more time to adapt to the new rules. The delay is the result of a compromise within the government coalition. The far-right League wanted to freeze the reform indefinitely, while other members of the executive, led by Italy’s Finance Minister Giovanni Tria, argued for a two-month delay. Eventually, cooperative banks will get three additional months to meet a deadline to agree on merging with other banks.