The Italian government and the European Commission are nearing a provisional agreement on softer bail-in terms, according to several reports on 7 April.
The Italian government will be allowed to reimburse some investors who bought shares in banks that have failed, despite the bail-in regulations that came into force in 2016. Bail-in regulations envisage shareholders, bondholders, and those with deposits above €100,000 stepping in to save a defaulting bank before the taxpayer.
Under the new provisional deal between the EU and Rome, bondholders and shareholders of failed Italian banks can be compensated. The reason is that many clients who sought to buy mortgages were often obliged to buy bank shares in a specific to the Italian market package deal.
The key to compensation entitlement will be income. Shareholders with annual incomes below €35,000 and assets worth less than €100,000 will be automatically entitled to compensation.