ECB Says Paschi Needs $9.2 Billion, More Than Bank’s Plan

Jon Banking, Economy, Government, Market Commentary

The European Central Bank said Banca Monte dei Paschi di Siena SpA needs about 8.8 billion ($9.2 billion) to bolster its balance sheet, almost twice the amount the Italian lender had sought to raise in a failed capital increase.
The calculation is based on the results of a 2016 stress test, the Italian bank said in a statement late Monday, citing two letters from the ECB. While the ECB saw worsening liquidity at Monte Paschi between Nov. 30 and Dec. 21, it still considers the Italian bank to be solvent. The lender is seeking additional information on the central bank’s calculations.
The Italian government said Friday it will plow as much as 20 billion into Monte Paschi and other banks after the lender failed in its plan to raise about 5 billion from the market. Chief Executive Officer Marco Morelli had crisscrossed the globe looking for investors to back the bank’s reorganization plan, which included a share sale, a debt-for-equity swap and the sale of 28 billion of soured loans.

This post was published at bloomberg