Milan

MPS stock loses more than 5% after derivatives scandal

Stock plunges day after Mussari resigns from ABI

MPS stock loses more than 5% after derivatives scandal

Milan, January 23 - Italian bank Monte dei Paschi di Siena's (MPS) stock lost over 5% in early trading Wednesday morning, the day after ex-chairman Giuseppe Mussari resigned from his post as president of the Italian banking association ABI due to a derivatives scandal stemming from his tenure at MPS. Mussari said he was innocent of wrong-doing. Derivatives transactions in 2009 which were used to improve the banks accounts and could create a 220-million-euro hole in MPS's books for 2012, according to reports. Trading in the stock was suspended at the start of Wednesday when its price began to plunge. Analysts said the derivatives affair hits the 540-year-old bank's image, but will not provoke serious financial consequences, as the charges will be covered by the Italian government's 3.9-billion-euro financial aid package to MPS via so-called "Monti bonds". Wednesday marks the second day of pummeling for MPS stock. On Tuesday, when news broke of the 2009 incident, investors pelted MPS and it lost 5.7%. photo: Giuseppe Mussari.

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