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Italy backs 8 percent minimum bail-in for ailing banks

The Italian Economy Minister, Fabrizio Saccomanni, arrives at the G7 Finance Ministers meeting in Aylesbury, southern England May 10, 2013.
The Italian Economy Minister, Fabrizio Saccomanni, arrives at the G7 Finance Ministers meeting in Aylesbury, southern England May 10, 2013.

BRUSSELS (Reuters) - Italy's Economy Minister Fabrizio Saccomanni said on Tuesday that public intervention on troubled banks should come after inflicting losses on bondholders through a minimum bail-in of 8 percent of total bank liabilities.

Yet, Saccomanni the introduction of bail-in clauses may spread risks across the euro zone banking sector.

"In case of a systemic crisis, public intervention would be preferable to the risk of contagion generated by an extended use of bail-in (clauses)," Saccomanni said speaking at a meeting of European Union finance ministers in Brussels.

(Reporting by Francesco Guarascio, writing by Francesca Landini; editing by Lisa Jucca)

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