Government Steps in to Save Monte dei Paschi

The Italian government approved a decree on Friday to bail out Monte dei Paschi di Siena (BMPS.MI) after the world’s oldest bank failed to win investor backing for a desperately needed capital increase.

Looking to end a protracted banking crisis that has gummed up the economy, Prime Minister Paolo Gentiloni said his Cabinet had authorised a 20 billion-euro ($20.9 billion) fund to help lenders in distress – first and foremost Monte dei Paschi.

Within minutes of the late-night Cabinet meeting ending, the country’s third largest lender issued a statement saying it would formally request state aid, opening the way for possibly the biggest Italian bank nationalization in decades.

Reuters

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Former Craig

Former Craig

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.