Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

Preliminary rescue deal for Monte dei Paschi

Thursday, June 01, 2017 - 01:20

The European Commission and Italy have reached a preliminary agreement on a state bailout for Monte dei Paschi di Siena that includes heavy cost cuts, losses for some investors and a cap on pay for the bank's top executives. Ciara Lee reports

▲ Hide Transcript

View Transcript

Months of negotiations, potentially brought to an end. The European Commission and Italy have reached a preliminary agreement on a state bailout for the world's oldest bank Monte dei Paschi. Italy's fourth biggest lender, and the worst performer in European stress tests last year, was forced to request state aid in December To help cover a capital shortfall of 8.8 billion euros The deal includes heavy cost cuts, losses for some investors and a cap on pay for the bank's top executives. The Commission says it's agreed in principle on a restructuring plan And can be bailed out by the state under new European rules for crisis banks. The government could end up injecting some 6.6 billion euros into the bank, taking a stake of around 70 percent. Burdened by a bad loan pile and a mismanagement scandal, Monte dei Paschi has been struggling for years. But Italy faces a much bigger hurdle in winning European approval for a state bailout of two other banks - Banca Popolare and Veneto Banca. Sources say the EU wants an additional injection of 1.2 billion euros by private investors before taxpayer money can be used Something Rome is thought to be struggling to find.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Preliminary rescue deal for Monte dei Paschi

Thursday, June 01, 2017 - 01:20