Italy’s watchdog reportedly suspends trading in Carige shares

Alessia Pierdomenico | Bloomberg | Getty Images

A pedestrian passes a Banca Carige SpA financial institution department in Rome, Italy.

The European Central Bank has appointed short-term directors for troubled Italian lender Banca Carige with the choice coming after nearly all of the financial institution’s board members resigned on Wednesday.

The ECB stated in an announcement Wednesday that it had appointed three short-term directors and a surveillance committee to interchange the board of administrators and to “take charge of Banca Carige.”

“The resignation of the majority of the board made the installation of temporary administration necessary to steer the bank in order to stabilize its governance and pursue effective solutions for ensuring sustainable stability and compliance,” the ECB stated.

The ECB appointed Fabio Innocenzi, Pietro Modiano and Raffaele Lener as short-term directors of the financial institution.

Temporary directors are tasked with safeguarding the soundness of a financial institution by carefully monitoring its state of affairs, constantly informing the ECB and, if vital, “taking action to ensure that the bank restores compliance with capital requirements in a sustainable manner,” the central financial institution’s assertion famous.

Shares of different Italian lenders fell following the announcement, with UBI Banca down 3.8 % and BPER Banca off by 3.4 %.

Earlier on Wednesday Italy’s market watchdog Consob stated it had suspended trading in shares of Banca Carige for a day. The watchdog stated Carige requested the suspension of trading in its shares forward of the assertion on the financial institution’s governance.

The Genoa-based financial institution final month didn’t win shareholder backing for a share subject value 400 million euros ($459 million) that was a part of a rescue plan financed by Italian lenders to protect the trade from the chance of one other banking collapse.

The ECB which supervises straight Italy’s 10th largest financial institution, has instructed Carige to finish its capital strengthening plan and search a merger with a stronger accomplice.

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