ITALY SETS RULES FOR COMPANY HOLDINGS IN BANKS

  Companies will henceforth be able to own
  stakes in banks, but these should not constitute a "dominant"
  holding, an Italian government committee ruled.
      The Interministerial Committee on Credit and Savings,
  headed by Treasury Minister Giovanni Goria, said its decision
  reflected the "need to safeguard the principle of separation
  between banks and non-financial concerns."
      It did not quantify what might constitute a "dominant"
  holding.
      The committee also set conditions for the allocation of
  credits by banks to companies or individuals holding stakes in
  them, and stipulates conditions under which the Bank of Italy
  could exercise its powers of control in the case of stakes held
  by banks in companies or other banks.
      Under the ruling, credits given by banks or their
  subsidiaries to groups or individuals holding five pct or more
  of the bank's capital must not exceed defined limits.
      The value of credits given cannot exceed either one-fifth
  of the combined capital and reserves of the bank itself or
  two-fifths of the value of the stake owned in the bank by the
  group or individual concerned.
      Exceptions to these conditions include credits to concerns
  in which the bank itself has a stake and to branches of foreign
  banks. Credits made by foreign companies or banks to
  subsidiaries which have their legal base in Italy will also be
  excluded from the conditions.
      The Bank of Italy will request banks to insert rules in
  their statutes to ensure that companies or individuals holding
  five pct or more of the bank's capital are not given privileged
  treatment with regard to credit allocation and terms.
      With regard to bank holdings in companies, the Bank of
  Italy can exercise supervisory controls when information on a
  bank's consolidated activities show single shareholdings in a
  company or another bank of 25 pct or more, owned directly or
  indirectly.
      Such controls can also be exercised even if the stake held
  is below 25 pct if it can be considered a controlling interest.
      The controls will not be exercised in cases where the value
  of the bank's stake in a concern is below the lesser of two
  predefined limits.
      These limits are set at 15 billion lire or two pct of the
  total assets of the parent company of the shareholding bank.
  

