Italian banks have relied heavily on their customers for funding, selling them junior or subordinated bonds that, in the event of bankruptcy, would be repaid only after senior debt holders and other creditors have been reimbursed. Such bonds have been brought into sharp focus in Italy by the government-sponsored rescue of four small banks last year.
That scheme, which had to comply with tougher European rules aimed at putting the burden of bank rescues on investors rather than taxpayers, resulted in 12,500 small savers losing a total of 430 million euros invested in junior debt.
The Bank of Italy document, which was supposed to remain confidential but was circulated by consumer association Adusbef, said that at the end of October Italian families held 31 billion euros of banks' junior debt, or 46 percent of the total.
Foreign investors held about 20 percent, while the banks themselves had 17 percent of the bonds after buying back some of them. Italy's 10 leading banks have issued 55 billion euros of junior bonds, according to the Bank of Italy document.
The three biggest lenders -- UniCredit, Intesa Sanpaolo and Monte dei Paschi di Siena -- have issued bonds worth 22.8 billion euros, 14.4 billion euros and 5.3 billion euros respectively.
The Bank of Italy has called for a ban on the sale of such bonds to retail clients.