European Central Bank

ECB: 2 troubled Italian banks failing, to face insolvency

The European Central Bank has pulled the plug on two troubled Italian banks, sending them into insolvency proceedings as it pushes ahead with efforts to clean up weak banks holding back the economy.

The two banks, Veneto Banca and Banca Popolare di Vicenza, have struggled to overcome high levels of loans that were not being paid back.

The ECB said Friday it had given the banks time to raise more capital but the banks had not been able to offer credible solutions. It ruled they were "failing or about to fail," and they will now face insolvency proceedings in Italy.

The Italian Economy and Finance Ministry said the government would meet over the weekend to...