Urgent Decree of the Minister of Economy and Finance, President of the CICR, of 27 December 2010, No. 1079

Secretariat of the Interministerial Committee for Credit and Savings The Minister of Economy and Finance President of the Interministerial Committee for Credit and Savings

HAVING REGARD TO Directives 2006/48/EC and 2006/49/EC of the European Parliament and of the Council of 14 July 2006, relating to the access to the activity of credit institutions and its exercise and on the prudential supervision of credit institutions and investment firms, as subsequently amended, in particular by Directives 2009/27/EC, 2009/83/EC and 2009/111/EC of the European Parliament and of the Council of 7 April 2009, 27 July 2009 and 16 September 2009 respectively;

HAVING REGARD TO Legislative Decree 10 September 1993, No. 385 and subsequent amendments and integrations, containing the "Consolidated Text of Laws on Banking and Credit" (TUB) and, in particular, the articles:

• Article 53, paragraph 1, letters b) and d) and Article 67, paragraph 1, letters b) and d), which provide that the Bank of Italy, in accordance with the resolutions of the CICR, issues provisions directed at banks and banking groups concerning, inter alia, the containment of risk in its various configurations and administrative and accounting organization and internal controls;
• Article 53, paragraph 3, which attributes to the Bank of Italy the power to adopt specific measures directed at individual banks in the matters indicated in paragraph 1 of the same article, where the situation requires it.

HAVING REGARD TO the Decree of the Minister of the Treasury of 22 June 1993, on the matter of "control of large credit limits";

HAVING REGARD TO the Urgent Decree of the Minister of Economy and Finance - President of the CICR of 27 December 2006, No. 933, on the matter of "capital adequacy, risk containment and public information by banks and banking groups";

ON THE PROPOSAL formulated by the Bank of Italy;

DEEMING it urgent to provide, pursuant to and for the effects of Article 3, paragraph 2, TUB;

The Minister of Economy and Finance President of the Interministerial Committee for Credit and Savings

DECREES

Article 1 (Object)

1. This decree sets out the criteria to which the Bank of Italy adheres in regulating the matter of concentration of exposures undertaken by banks and banking groups towards a customer or a group of connected customers.

2. In regulating the matter of risk concentration, the Bank of Italy adheres, in conformity with what is provided by Article 6 of the TUB, to the provisions of Directives 2006/48/EC and 2006/49/EC and to the guidelines and recommendations provided by the competent Community bodies in order to ensure the convergence of regulation and supervisory practices.

Article 2 (Subjects granted credit)

1. For the purposes of this regulation, subjects granted credit are considered to be individual borrowers as well as groups of customers linked by legal or economic connection.

2. The Bank of Italy defines the methods for identifying groups of customers that constitute a unified set from a risk perspective due to being linked by legal or economic connection.

Article 3 (Credit limits)

1. The Bank of Italy identifies credit limits towards subjects granted credit and activities not subject to limits.

2. For the purposes of paragraph 1, exposures towards each subject granted credit must be contained within the limit of 25% of the regulatory capital of the bank and the banking group.

3. The Bank of Italy may provide for higher limits for exposures:

• undertaken by individual banks belonging to banking groups;
• towards a bank or an investment firm or a group of connected customers of which a bank or an investment firm is a part, provided that the exposure does not exceed € 150 million, and is in any case contained within 100% of the regulatory capital of the bank and the banking group.

4. The Bank of Italy may establish stricter limits, also towards individual banks or banking groups:

• taking into account their technical-organizational situation;
• in the case of companies part of a group that are established in non-EU countries, provided that adequate supervision systems do not exist in the countries of establishment;
• for exposures towards subjects who, by virtue of the shareholdings held, can influence the management of a bank or a banking group.

Article 4 (Weighting of credit facilities)

1. The Bank of Italy establishes the methods for calculating credit facilities, providing for the application of specific weighting factors for certain types of exposures and counterparties.

2. In particular, the Bank of Italy may provide for the application of more favorable weighting factors for exposures undertaken towards subjects belonging to the same banking group and for exposures towards the parent company or other companies controlled by the parent company, provided that all are subject to consolidated supervision in an EU country.

Article 5 (Procedures and organizational rules for the assumption of large risks)

1. The Bank of Italy establishes the procedures and organizational rules that licensed entities must respect for the assumption of exposures towards subjects granted credit that are significant relative to regulatory capital ("large risks").

Article 6 (Branches in Italy of non-EU banks)

1. The Bank of Italy regulates the application of the provisions of this decree to branches in Italy of non-EU banks.

Article 7 (Transitional provisions)

1. The Bank of Italy may, in harmony with what is provided by Directives 2006/48/EC and 2006/49/EC and by the guidelines and recommendations provided by the competent Community bodies, establish a transitional regime for exposures that exceed the limits established pursuant to Article 3 due to the more restrictive calculation criteria introduced in implementation of this decree.

Article 8 (Implementation and repeals)

1. The Bank of Italy issues provisions for the implementation of this decree.

2. The Decree of the Minister of the Treasury of 22 June 1993 on the matter of "control of large credit limits" is repealed with effect from the entry into force of the provisions issued by the Bank of Italy in implementation of this decree.

This decree shall be published in the Official Gazette of the Italian Republic.

Rome, 27 December 2010 THE MINISTER [Signature]