Italian Bank Monte Paschi Wins Support from EU and Italy

Italian Bank Monte Paschi

European Union and Italy have agreed to provide help to ailing financial behemoth Banca Monte dei Paschi di Siena under tougher conditions. The conditions include more capital hike by the bank and stricter cost cutting. Italy’s third largest bank is suffering due to higher exposure to bond investment and derivatives scandal.

European Competition Commissioner Joaquin Almunia has stressed that the Italian bank will have to raise more capital. The bank was planning to raise Euro 1 billion, but the new conditions expect the bank to raise at least two billion Euro. Additionally, Monte Paschi will have to reduce the Italian bond holding. The bank holds government bonds worth 29 billion at interest rate of 9 percent.

Monte Paschi reported quarterly loss of 279 million euro during the second quarter. The bank has registered fall in net interest income. Monte Paschi has collective loss of 7.9 billion euro during the past two year period.

The European commission is investigating the role of bank in anti-competitive market practices. Italy has been reluctant to nationalise banks with weak financial condition. The bank will have to sell the government bonds. However, the period for the said sale has not been decided yet.

FrenchTribune Specials

Gimli Harbour boats locked by Zebra mussel

Reports showed that hundreds of boats at Gimli Harbourof Lake Winnipeg were stuck due to the increased population of zebra mussels in the area.

Experts said that hundreds of boats are taken out of the Harbour every year but this year the boatowners found that zebra musselsare stuck to hulls and propellers.Dean Thorkelsson, who works as...

Most Popular

Fungi makecontribution to a wine's flavour and taste

According to a new study, a fungi makes a "small but...

NASA announces three finalists for Mars Habitat Challenge

American space agency, NASA has announced three teams...

Astronomersfind 5,000 times larger Black Hole than the Sun

A team of astronomers have discovered a huge new Black...

Small robots can reduce carbon dioxide levels

A team of Nano-engineers have developed tiny robots that...


Can Greece Come out of Economic Problems: