Banks Bloated on Sovereign Debt Weaken Italy in Row With Germany
- Renzi says he will veto efforts to curb sovereign holdings
- Germany resists banking union until risks are reduced
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A drive to tighten rules over how much sovereign debt banks are allowed to own has raised the alarm in the home of the euro region’s largest bond market.
Italy’s prime minister, Matteo Renzi, vowed last month to veto any attempt to cap holdings, putting him at odds with Germany. Italian government securities account for 10.4 percent of the country’s bank assets, the most among major European economies and compared with 3.2 percent in Germany, the latest European Central Bank figures show.