ROME - Forcing European lenders to risk-weight their holdings of sovereign bonds would be harmful, but offering incentives to diversify such holdings could be discussed, Italy's economy minister said on Monday.
Italian banks are large holders of the country's 2.3 trillion euro debt and Rome is opposed to a proposal to strip sovereign bonds of their risk-free status as a pre-condition to move towards closer banking integration within Europe.
"Changes to the risk weighting of government bonds would be damaging and inopportune, while there's a willingness to discuss incentives to diversify portfolios, not just of government bonds, to better harmonise tools to handle crises," Economy Minister Roberto Gualtieri told an event in Rome.
(Reporting by Stefano Bernabei and Giuseppe Fonte; Editing by Crispian Balmer) ((valentina.za@thomsonreuters.com; +39 02 6612 9526;))
