October 30, 2008

ROME -- Italian Premier Silvio Berlusconi said Wednesday the government was prepared to buy bank bonds and savings shares to help lenders cope with the global financial crisis. Of the four big European economies, Italy is the only country yet to give state money to help its banks. The government maintains its banks are more solid than their European peers, and that it will only step in if needed, a line Mr. Berlusconi reiterated Wednesday.” If banks want to increase their liquidity or their capital, the state is ready to intervene by underwriting bonds and savings shares," he told a seminar of the retailers' association Confcommercio. The Italian premier added that the government would step in without penalizing the management of a bank seeking help.

Rome has readied an injection of up to €20 billion ($25 billion) in Italian banks, a person familiar with the matter said, using a plan resembling one that France announced last week. Separately, a study released Wednesday showed that Italy's building industry is already in recession and that investments will drop sharply through 2010.Investments in the construction sector are projected to fall 4.4% this year, 5.7% next year and 2.5% in 2010, according to the report by Cresme, a research institute covering real-estate trends. The figures are adjusted to take inflation into account.