Italy Granted "Extraordinary " €150BN Bank Bailout Program To Prevent "Panic, Run On Deposits"
As we noted today, the rumors of an Italian bank bailout, which started on Monday morning, and were promptly shot down by Merkel the next day, got louder after a Reuters report that the Italian government is considering more creative ways to inject liquidity into Italy's banks. However that was just an appetizer to a main course, which came later today when as the WSJ reported citing a spokeswoman for the European Union’s executive arm that the "European Commission has authorized Italy to use government guarantees to create a precautionary liquidity support program for their banks."
How did this happen so quietly under the table and without Merkel's blessing? WSJ says that the program was approved under the bloc’s “extraordinary crisis rules for state aid."