Explosive Device Found Outside Italian Bank

MILAN (Reuters) -

Italian police found a rudimentary explosive device on Thursday outside a branch of Banca Etruria, one of four lenders whose rescue from bankruptcy has triggered public anger after thousands of retail investors lost their life savings.

A bank employee told Reuters that bomb disposal experts had conducted a controlled explosion, and the branch, located on the outskirts of Perugia, a town in the central Umbria region, was operating normally. Italian news agency Ansa said the device consisted of a bag containing rusty nails, fertilizer and batteries that could ignite it.

Last month Italy salvaged Banca Etruria and three other small ailing banks under new European Union rules that require investors to bear some of the losses to reduce the burden on taxpayers.

Shareholders and some 12,500 holders of riskier junior debt saw their savings wiped out. Banca Etruria in particular has become the focus of mounting anger as it sold the highest amount of retail bonds among the four rescued lenders.

Many bond holders have complained that they were not properly informed about the risks involved and the government has created a 100-million euro fund to reimburse the most vulnerable among them.