Bank of Italy Offers Debt Swaps Up to $54 Billion

ROME, Oct 13 (Reuters) - The Bank of Italy will temporarily swap state bonds for bank debt up to a total of 40 billion euro, governor Mario Draghi said on Monday at a news conference to present new government measures to tackle the financial crisis.

"For those banks that would like to refinance themselves it is now possible to temporarily convert, to swap the paper of inferior quality that they have in their own portfolios for Bank of Italy notes and to take these to the European Central Bank for refinancing," Draghi said.

"There is a maximum amount of 40 billion euros. So it's a very significant measure which does not aim to recapitalise but to simply make the market more liquid," he added. cmr COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved.

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