December 23, 2016 / 12:10 PM / 10 months ago

EU executive seeks to ensure Monte dei Paschi bailout meets conditions

BRUSSELS (Reuters) - The European Commission said on Friday it supported the objective of Italian authorities to strengthen the banking sector and would work with them to establish conditions were met for a bailout of Monte dei Paschi di Siena (BMPS.MI).

The main entrance of the Monte dei Paschi bank headquarters is seen in Siena, Italy March 13, 2012. REUTERS/Max Rossi/File photo

State support will have be to be approved under EU state aid rules before it can be granted and on the basis of a sound restructuring plan, a Commission spokeswoman said.

“A precautionary recapitalisation solution can be put in place in full compliance with EU rules if the conditions are met, and require burden-sharing by shareholders and sub-debt investors,” she said, adding that depositors would be fully protected as per any other bank.

It added that the responsibility for correcting cases of mis-selling lay with the sellers of the products concerned, as Italy had made clear, and urged Italian authorities to tackle the root causes of mis-selling to prevent a re-occurrence.

Reporting By Philip Blenkinsop, editing by Julia Fioretti

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