Bank of Italy head says wise to be ready for state aid for banks

September 30, 2016 2:04 AM EDT

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MILAN (Reuters) - State aid for Italian banks is something that should be considered even if it remains a remote possibility, Bank of Italy Governor Ignazio Visco told Italian daily Il Foglio on Friday.

"It is wise to get ready for the idea of state aid even if that does not mean it will be necessary," Visco told the newspaper.

Troubled Italian lender Banca Monte dei Paschi di Siena has agreed with the European Central Bank a new restructuring plan based on a 5 billion-euro capital boost and the sale of 28 billion euros worth of bad loans.

But there is growing concern it may have to turn to the government for support.

Asked about foreign investors buying into Italian banks, Visco said the nationality of shareholders was not important but rather "their capacity to guarantee stability".

The central bank head said the constraints on Italian budgetary policy were due to the country's high public debt and not to European rules.

Asked about Italy's referendum in December on constitutional reform, Visco said the country had to "proceed along the path of change".

(Reporting by Stephen Jewkes)

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