Italy has been granted permission to step in and save two more of its regional banks at a potential cost of as much as €17bn (£15bn).
For a nominal sum of €1, national banking group Intesa Sanpaolo will take on the parts of Banca Popolare di Vicenza and Veneto Banca which are able to be saved.
Intesa will be handed €4.8bn to shore up its capital reserves and a further €400m to provide a buffer in case credits "turn sour", says the Financial Times.
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In reality the deal means account holders and their deposits will be moved to Intesa from today, preventing a run on the banks. Any bad loans on the books will be liquidated along with the legal entities.
Italy will bear the cost for those disposals, while €4.2bn (£3.6bn) in shareholder equity and €1.2bn (£1bn) in junior debt will also be wiped out.
Around 4,000 jobs are expected to be lost as well, says the BBC.
The core costs for the rescue - which come in addition to €3.5bn (£3.1bn) in support from a state-backed bailout fund earlier this year - will come from the €20bn (£18bn) fund set up to cope with the rescue of Monte dei Paschi di Siena.
Italy said the additional costs could reach €17bn (£15bn).
The intervention has been backed by the European Commission and follows the EU-facilitated rescue of Spanish bank Banco Popular through Santander earlier this month.