Nov. 4 (Bloomberg) -- Italy's government-backed rescue plan for Italian banks will also make loans available to companies that are having trouble securing funds from Italian lenders.

The new structure ``will be called the Corporate Financing Fund and will serve to keep open a channel of financing to companies to avoid that in the context of a recession, banks restrict lending and choke companies,'' Finance Minister Giulio Tremonti said at a press conference in Brussels after a meeting of European finance chiefs.

The government may use tools such as perpetual bonds, which pay interest indefinitely, to help finance the plan, said Vittorio Grilli, the director general of the Italian Treasury. The funds for Italian companies will be part of a broader package of measures aimed at helping banks raise their capital levels to make it easier for them to sustain lending.

France and Germany led European governments in committing a combined $1.7 trillion to protect the region's banks as credit markets dried up after the collapse of Lehman Brothers Holdings Inc. The EU in late October pledged to present a joint recovery plan this month and EU leaders are scheduled to meet this week to coordinate their position before a summit of world leaders hosted by President George W. Bush on Nov. 15.

Intesa Sanpaolo SpA, UniCredit SpA, Banca Monte dei Paschi di Siena SpA and Banco Popolare Scarl have seen their shares tumble in recent weeks on concern about their capital levels and tightening credit markets.

To contact the reporter on this story: Lorenzo Totaro in Brussels at ltotaro@bloomberg.net

Last Updated: November 4, 2008 09:43 EST