Monte dei Paschi’s Bailout Approved
Monte dei Paschi’s Bailout Approved

Monte dei Paschi’s Bailout Approved

Monte dei Paschi’s Bailout Approved

The EU competition commission has approved a €5.4 billion ($6.14 billion) bailout of Italy’s troubled Monte dei Paschi di Siena, the world’s oldest bank, as part of a major overhaul.
The decision, announced in a statement late Tuesday, comes days after Brussels accepted that Italy could inject up to €17 billion ($19 billion) to break up two insolvent Venetian banks, Reuters approved.
Public bailouts were supposed to be a thing of the past after the eurozone created a banking union with specifically designed rules to keep taxpayers from having to bail the banks out.
Founded in Siena in 1472, BMPS has been in deep trouble since the eurozone debt crisis and will now be owned by the Italian state, which has ended up with a 70% stake.
EU Competition Commissioner Margrethe Vestager said the capital injection had been approved, noting it would “help BMPS meet capital needs” if economic conditions worsen unexpectedly.
The bailout is part of a rescue that the EU approved last month after BMPS failed to raise capital on the markets last year.
In exchange for the lifeline, Italy must accept a drastic EU-approved restructuring plan for BMPS that reports say involves up to 6,000 job cuts out of a total of 25,000.
The commission said on Tuesday the plan would involve salary caps for senior managers and a demand that the bank reconfigure its business model toward a smaller retail clientele.
The plan will also see €26.1 billion in troubled assets set aside in a so-called “bad bank”.
Weakened by the disastrous purchase in 2007 of the Antonveneta bank, BMPS quickly drifted into scandal when its management team was accused of fraud and misuse of funds.
In addition to the bailout, authorities have also forced the bank’s private lenders to become shareholders.

Short URL : https://goo.gl/TtZdzs
  1. https://goo.gl/yMzYBW
  • https://goo.gl/AsdvyU
  • https://goo.gl/7JoZLv
  • https://goo.gl/eaewSd
  • https://goo.gl/MjL9Yx

You can also read ...

Cybercrime cost has jumped by $155 billion since 2014.
Global businesses are losing the equivalent of nearly 1% of...
Pakistan to Be Placed Back on FATF List
Pakistan will be placed back onto an international terrorism-...
US Presses India to Cut Tariffs
US businesses and diplomats are pressing India to cut tariffs...
UAE Inflation  to Rise to 3.3%
Inflation is expected to rise to 3.3% in the UAE as the 5%...
The ECB expressed more confidence that inflation would converge over time to its 2% target.
Released within 24 hours of each other this week, the minutes...
Turkey will have the widest current account deficit this year at 4.5% of GDP, followed by Argentina and Colombia.
As the US and European countries embark on a monetary...
Europe’s main London, Frankfurt and Paris markets barely budged in early moves.
A stronger dollar and slightly higher global borrowing costs...
Nigeria Bank Sees Faster Growth
Nigeria’s biggest bank by revenue expects lending to...

Add new comment

Read our comment policy before posting your viewpoints