Finance

The European Central Bank has appointed temporary administrators for troubled Italian lender Banca Carige with the decision coming after the majority of the bank’s board members resigned on Wednesday.

The ECB said in a statement Wednesday that it had appointed three temporary administrators and a surveillance committee to replace the board of directors and to “take charge of Banca Carige.”

“The resignation of the majority of the board made the installation of temporary administration necessary to steer the bank in order to stabilize its governance and pursue effective solutions for ensuring sustainable stability and compliance,” the ECB said.

The ECB appointed Fabio Innocenzi, Pietro Modiano and Raffaele Lener as temporary administrators of the bank.

Temporary administrators are tasked with safeguarding the stability of a bank by closely monitoring its situation, continuously informing the ECB and, if necessary, “taking action to ensure that the bank restores compliance with capital requirements in a sustainable manner,” the central bank’s statement noted.

Shares of other Italian lenders fell following the announcement, with UBI Banca down 3.8 percent and BPER Banca off by 3.4 percent.

Earlier on Wednesday Italy’s market watchdog Consob said it had suspended trading in shares of Banca Carige for a day. The watchdog said Carige requested the suspension of trading in its shares ahead of the statement on the bank’s governance.

The Genoa-based bank last month failed to win shareholder backing for a share issue worth 400 million euros ($459 million) that was part of a rescue plan financed by Italian lenders to shield the industry from the risk of another banking collapse.

The ECB which supervises directly Italy’s 10th largest bank, has told Carige to complete its capital strengthening plan and seek a merger with a stronger partner.

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