Italy To Nationalize Monte Paschi After Private Sector Rescue Fails

Jon Alternative Media, Banking, Blogosphere, Economy, Government, Market Commentary

Update: the FT writes that the Italian govt set to take a stake between 50% and 70% in Monte dei Paschi, up from the current 4% stake, as part of the government’s third bailout in as many years. As the FT adds, “the government rescue, which had long been resisted in Rome, is designed to draw a line under the slow-burn crisis in Italian banking that has alarmed investors and become the main source of concern for European financial regulators.”
It remains to be seen if Germany, long a critic of state bailouts, will be as agreeable.
Meanwhile, Pier Carlo Padoan, the Italin finmin, insisted that apart from a few ‘critical’ situations, Italy’s banking system was ‘solid and healthy’. He vowed to ‘minimise, if not erase’ any impact of the public intervention on the savings of ordinary citizens.
The third bailout, and re-nationalization, of Italy’s third largest banks is imminent following a Reuters report that the ongoing, JPM-led attempt to execute a complex private sector bailout of Monte Paschi has failed.

This post was published at Zero Hedge on Dec 21, 2016.