Italian officials, banks and asset managers have agreed to the launch of a €5bn rescue fund, in order to help troubled Italian banks offload some of their non performing loans (NPLs).
The fund, called the Atlante fund after the Greek god of endurance Atlas, will be managed by private fund manager Quaestio Capital Management SGR, in a bid to counteract EU scrutiny on prohibitive state aid. It is set to be financed by banks and institutional investors, according to the Italian government.
The Atlante fund will act as a buyer of last resort, aimed at restoring investor confidence in the Italian financial sector.
Italy’s banks have some of the highest ratios over non-performing loans in Europe, with more than 30% of Banca Monte dei Paschi di Siena’s assets and 27.8% of Banca Carige’s assets considered to be NPLs. The total level of NPLs held by Italian banks is estimated to be close to €360bn, compared to an EU average of just over 3%, according to Bloomberg Intelligence data.