Italy's president says Paschi situation 'serious'

Napolitano has 'complete faith' in Bank of Italy

Italy's president says Paschi situation 'serious'

Milan, January 24 – Italian President Giorgio Napolitano on Thursday said the situation Italian bank Monte dei Paschi di Siena is in was "serious" and said he had full faith in the Bank of Italy which was taking care of the matter. Monte dei Paschi (MPS), the world’s oldest bank, is currently embroiled in a derivatives scandal after reports emerged that a three-year-old derivative deal with Japanese bank Nomura meant it would book additional losses running in the millions of euros. "I am not a banks expert but if the matter is serious, it needs to be taken care of it", Napolitano said. "And I have full faith in the Bank of Italy", he added. Napolitano was answering journalists' questions in Turin. The news reported by Italian media outlets led to the resignation of Monte dei Paschi ex-chairman Giuseppe Mussari from his post as chief of the Italian banking association ABI on Wednesday. Mussari denies any wrongdoing. Last year MPS, Italy's third-biggest lender, had to request 3.9 billion euros in government aid due to possible losses from past transactions related to its exposure to Italian state debt.

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