Italian Bank Carige Put Under Administration for Capital Woe (2)

The European Central Bank took the unprecedented step of placing the cash-strapped Italian lender Banca Carige SpA in temporary administration, a move that could be a prelude to a sale or merger.

The administrators and a three-member surveillance committee will focus on reducing balance sheet risk and finding a possible partner for the bank, Carige said in a statement. The ECB has consistently told the lender that a merger would be a good option, a person familiar with the matter said, asking not to be identified because they aren’t authorized to discuss the deliberations.

The move raises the question of ...