ITALIAN BANK DEPOSIT GUARANTEE FUND APPROVED
The executive committee of the Italian
national banking association (ABI), representing the country's
major credit institutions, approved the setting up of a common
reserve fund to guarantee customer deposits in the event of
bank failures.
    ABI chairman Giannino Parravicini told a news conference
that the fund would not be operative until the latter part of
1987, and only on condition that 60 pct of banks representing
at least 75 pct of total deposits participated.
    He said the fund would initially have 1,000 billion lire
available and would cover deposits of up to three billion lire.
    A statute for establishing a deposit guarantee fund has
already been approved by the Bank of Italy and by an
interministerial committee on credit and savings.
    The 1,000 billion lire initial funding, which will be
provided through contributions from banks which opt to join the
scheme, compares with an originally targetted figure of 4,000
billion lire.
    Parravicini said the fund would be gradually increased to
4,000 billion lire by end 1991, and that the decision to
achieve this figure gradually rather than immediately was due
to fiscal considerations.
    The fund, still to be formally ratified by ABI's steering
committee, will provide 100 pct coverage on deposits of up to
200 mln lire, 90 pct on deposits between 200 mln and one
billion lire and 80 pct on those between one billion and three
billion lire.
    Assuming that all banks join the fund, contributions would
be equivalent to around 0.25 pt of a bank's total deposits.
    The ABI's steering committee later unanimously ratified the
executive committee's decision to create the common reserve
fund.
 REUTER
