The biggest headline of the weekend came from Italy, as the country's government presented plans to wind down Veneto Banca and Banca Popolare di Vincenza. The liquidation of the two banks is expected to cost Italian taxpayers as much as 17 billion euros.
The rescue funds will be used to liquidate the bad assets of the two banks while good assets will be transferred to Intesa Sanpaolo.
Senior bonds of the two troubled banks had seen pressure in recent weeks, reflecting concerns that the rescue of the banks could follow the Cypriot template, which involved a bail-in of large creditors and was most recently used in the case of Spain's Banco Popular. However, the European Commission approved a plan that will fully protect senior bondholders.
With Intesa Sanpaolo set to receive a basket of "good" assets, Intesa shares have jumped 4.4% in Milan today, leading other bank stocks higher.
It is worth noting that the European Bank Recovery and Resolution Directive requires that depositors and large creditors of banks are bailed in before taxpayer funds can be used. However, the approach can be modified if national regulators have concerns about risks to systemic stability.
The weekend decision has received push-back from Markus Ferber, who is a member of Germany's Christian Social Union and has a seat in the European Parliament. Mr. Ferber said that the European Commission's decision to allow the bailout to proceed breaks the promise of not involving taxpayers in bank bailouts and it will put to bed hopes for the establishment of a European Banking union.