Italy bank stocks, bonds fall on report Brussels considering disciplinary action

European Commission President Jean-Claude Juncker

Francois Lenoir | Reuters

Italian banking stocks fell and government bond yields rose in thin holiday trade Monday after a report Brussels is considering disciplinary action over Rome's failure to rein in public debt.

The banking index was down 1.7% at 1350 GMT, extending earlier losses. Government bond yields extended their rise across the board, with the benchmark 10-year yield up 7 basis points to 2.62%.

A report from Bloomberg cited an official as saying the European Commission was considering proposing the disciplinary procedure next week, potentially paving the way for a 3.5-billion-euro ($4 billion) penalty.

The commission will issue a report on Italian public finances on June 5, with the final decision falling to its president, Jean-Claude Juncker.

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