FRANKFURT (Reuters) - Italian lenders Veneto Banca and Banca Popolare di Vicenza are failing or likely to fail and will be wound down, the European Central Bank ruled on Friday.
"The ECB had given the banks time to present capital plans, but the banks had been unable to offer credible solutions going forward," the ECB said.
"Consequently, the ECB deemed that both banks were failing or likely to fail and duly informed the Single Resolution Board (SRB), which concluded that the conditions for a resolution action in relation to the two banks had not been met."
"The banks will be wound up under Italian insolvency procedures," it added.
The Italian government is expected to start liquidation proceedings for the two ailing lenders sometime this weekend, issuing an emergency decree that would effectively remove one of the government's biggest banking headaches by splitting the two lenders' assets into "good" and "bad" banks.