December 23, 2016 / 12:13 PM / a year 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).

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 recapitalization 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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