VENTURE CAPITAL POST

Italy faces a €4.95 billion ($5.65 billion) bailout after bad loans in its banks accumulated to an alarming rate. The bank shares have lost close to half of its value in the last 12 months.

The European Central Bank must continue its asset-purchasing program to ensure that euro area inflation returns to target levels, despite signs that deflation fears have eased, ECB governing council member Ignazio Visco said on Tuesday.

At least five investment banks are vying to win a mandate from Banca Popolare di Milano (BPM) (PMII.MI) and find it a partner as Italian cooperative lenders gear up for a wave of mergers following a landmark reform of the sector.

Italy is considering setting up a state-backed "bad bank" to help clean up its banking sector, Economy Minister Pier Carlo Padoan said in a newspaper interview on Sunday.

The European Central Bank's bond buying program will give a decisive boost to Italy's stagnant economy, business lobby Confindustria said on Saturday, while the Bank of Italy said it would make it easier to pass reforms.

Marche businessman Francesco Merloni said investors were willing to put capital in Banca Marche.

Banca Carige was advised by the Bank of Italy to make changes in policy and personnel as it prepares for regulatory changes for next year.

Visco of ECB stressed the importance of communication in an exit strategy.