Monte dei Paschi

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Monte Dei Paschi, About To Be Able To Set Up Its Bad Bank

Bankinter | The European Commission (EC) has given Banca Monte Dei Paschi Di Siena (MPS) the go-ahead to finally set up a toxic asset restructuring entity. The plan has yet to be approved by the ECB and the Italian watchdog (Consob) but there is a high probability of success. The most important thing is that the EC does not consider the operation as a form of state aid. The finalisation of the process is planned for end-2020 or the beginning of 2021.

Monte Dei Paschi reacts to the ECB notification with its largest fall since May

Monte Dei Paschi Reacts To The ECB Notification With Its Largest Fall Since May

The flood of negative news about Italian banks continues. The shares of Banco Dei Paschi di Sienna (BMPS) fell -10.2% to 1.35€/share after receiving a request from the ECB to improve its solvency ratios. The central bank sees risks which affect the bank’s profitability and financing, but the Italian Economics Minister, Giovanni Tria, comments that “Italian banks do not have major problems”.

Monte Dei Paschi workforce cut

Monte Dei Paschi Cost Cutting Could Include 50% Of The Current Workforce

At the end of 2016, the Italian government approved the setting up of an up to 20 billion euros fund to provide financing for banks with problems of solvency and/or liquidity like (MPS). It’s good news for Italy’s financial system and for the country’s risk premium that international funds are showing interest in buying MPS’ unproductive assets.

Monte dei Paschi bailout

Does Monte dei Paschi bailout comply with EU regulations?

The German authorities have come out en masse to criticise the public bailout the Italian government is planning for Monte dei Paschi. For many observers, this decision implies “direct public aid” which goes against the European directive on banking solutions and restructurings.

Monte Dei Paschi reacts to the ECB notification with its largest fall since May

Monte Dei Paschi, An Example Of Italian Banks Solvency Problems

After the lack of success of private initiatives to help restructure Italy’s banking system, the government is now looking at how it can directly step in and help out the banks. Monte dei Paschi di Siena (MPS) is one of Italy’s biggest banks and the one which has the largest amount of toxic assets on its balance sheet by a long shot. At the end of the first quarter, MPS’ exposure to toxic assets was over 47 billion euros.

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The Monte dei Paschi effect

The contagion chain between Italy and Spain in the troubled eurozone’s periphery seems to have left Madrid virtually untouched.