Rome

ECB advises Italy to help Monte Paschi by taking up shares

Issuing more debt would burden bank further, ECB says

ECB advises Italy to help Monte Paschi by taking up shares

Rome, December 20 – The European Central Bank has suggested Italy should take ownership of new shares in Banca Monte dei Paschi di Siena, the world’s oldest bank, as opposed to issuing more debt to help the troubled lender. The Italian government earlier this month approved a 3.9 billion euro salvage package for the Siena-based bank after Monte dei Paschi had been forced to remedy the weakness in its capital base. The issuance of additional debt could create further difficulty to the lender as it would increase its repayment obligations, the ECB said, adding that it was preferable the bank issue new stock to raise capital instead. Photo: European Central Bank chief Mario Draghi

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