Twenty billion euros ($21.4 billion) earmarked by the Italian government will be enough to help recapitalize other weak banks after Monte dei Paschi di Siena, the Bank of Italy governor said on Saturday.
Ignazio Visco did not name any banks that may need government support to bolster their capital but bankers and analysts say Banca Popolare di Vicenza, Veneto Banca and Genoa-based Carige will likely have to strengthen their balance sheet soon.
The government is already expected to inject around 6.6 billion euros in Monte dei Paschi, taking a 70 percent stake in the bank after it failed to raise money from private investors in December.
"The injection of public funds into Banca Monte dei Paschi di Siena will presumably use up about a third of the 20 billion euros set aside by the government. There is more than enough room to address the recapitalization needs of any other Italian bank that meets the conditions laid down in the decree" Visco told a financial conference in Modena.
"However ... the banks must be willing to apply for public support and deal with the ensuing commitments."