The Italian government is proposing setting up a 100 million euro ($110 million) fund to compensate at least some of the 10,500 retail bond investors who lost money under a scheme to rescue four small lenders, a source close to the matter said.
Details of the proposal, contained in an amendment to the bank rescue bill, are still sketchy but the fund would be financed by other banks and be largely if not entirely aimed at small savers who were potentially mis-sold junior bonds by the four lenders.
Prime Minister Matteo Renzi, facing increasingly vocal protests from ordinary Italians whose investments were erased as part of the 3.6 billion-euro rescue scheme, was jeered by a small group of people shouting "Thief!" as he left a three-day political rally of his supporters in Florence.
Italy saved Banca Marche, Banca Etruria, CariChieti and CariFe at the end of November under new European Union "bail in" rules that shift losses to investors when a bank runs into trouble, removing the burden from taxpayers.
Some 130,000 shareholders and 10,500 junior bondholders were hit. For bondholders, it was the first time since the 1930s that they had suffered losses in a banking crisis.
The suicide of a pensioner who lost 110,000 euros in the rescue has added to the outcry, raising questions about whether the four banks - some of which were placed under special administration more than two years ago - had been warning customers clearly about the risks of buying the bonds.
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