Bank of Italy says only Monte Paschi received special loans
Troubled Italian lender Monte dei Paschi (BMPS.MI) was the only bank in the country to have received special loans from the Bank of Italy as the euro zone debt crisis escalated in late 2011, a senior official said on Saturday.
"The Bank of Italy did two loan operations in favour of Monte dei Paschi at the peak of the crisis," Bank of Italy director general Fabrizio Saccomanni told reporters at the margins of a finance conference in Bergamo.
"There were no other loans of this kind in Italy."
The Bank of Italy confirmed on Thursday that it had made the special loans to Monte Paschi, which faced severe liquidity strains after the euro zone debt crisis in the summer of 2011.
The bank, which is dependent on state aid, has been at the centre of a financial and political storm over a series of derivatives and structured finance trades that have left it facing losses of 730 million euros.
"In the operations, the Bank of Italy lent government bonds to Monte Paschi which the bank used as collateral to borrow at the European Central Bank refinancing operations," he said, adding that the loans had been repaid quickly and the European Central Bank was kept constantly informed.
- Tweet this
- Share this
- Digg this
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.