Italian lender Monte dei Paschi Liquidity Crisis Worsens
Uncategorized Tuesday, December 27th, 2016
BALTIMORE, MD (AFRICAN EXAMINER) – The Italian lender Monte dei Paschi is facing a capital shortfall of (£7.5bn), higher than the €5bn previously estimated by the bank.
European Central Bank said it came after Italy approved a €20bn fund to prop up its embattled banking sector on December 23.
Already, Monte dei Paschi had asked for a capital injection to stay afloat, as well as battling with a mountain of bad loans made to customers who cannot afford to repay them.
The Bank in a statement it issued Monday confirmed that it had officially asked the ECB to go ahead with a “precautionary recapitalisation”.
This arrangement will entail a forced conversion of the bank’s junior bonds – many of which are held by small investors into shares.
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