The ECB says no to krisbanken – Today’s Industry

the European central bank, world krisbanken Monte dei Paschi di Siena’s plea for more time to collect capital. The bank still needs to bring in 5 billion before the end of the year.

The Italian krisbanken the Monte dei Paschi di Siena may not more time. The ECB’s supervisory function rejects the application for the respite.

According to a source to Reuters don’t think the ECB that an extension would make no difference and the central bank would rather see the Italian government to step in.

the Request for more time should have come up earlier in the week. According to Monte dei Paschis board of directors, it is almost time to get pull out the 5 billion euros the bank is deemed to need before the end of the year, the deadline that the ECB is set.

a little over A billion is hedged by the lender converts its bonds, and the Italian government is reported to be prepared to fell in two billion. But the remaining two billion must be taken out from private, to institutional investors.

the Question has become particularly complicated after Italy’s prime minister Matteo Renzi has announced his resignation after the Italian referendum last week. The private investors who needed to get into the capital would rather see a new, stable government in place before they are ready to help krisbanken, according to the british “Financial Times”.

the Newspaper has also reported that Monte dei Paschi could need state aid within a couple of days if the ECB does not agree to extend the deadline to the end of January next year.

But a recapitalization from the Italian government would mean debt forgiveness amounting to from some of the bank’s lenders, something the Italian government has constantly tried to avoid. A large part of the shareholders in Monte dei Paschi are ordinary depositors.

The major banks who have been involved in the attempts to save the krisbanken now meet at the Italian ministry of finance at preparing an intervention from the state, according to a source for the Financial Times.

Uncertainty of the Monte dei Paschis the future has been around a long time but has been a particularly wet blanket over the Italian banking sector since the bank was the worst performing in the ECB’s stress tests in the summer. The concern for krisbanken can affect the banking system throughout the euro area, has proved difficult to shake.

the Stoxx Europe 600:s the sub-index for the banking sector has climbed since the morning but is now down to minus 0.7 per cent. Monte dei Paschi managed to over 5 per cent before the share handelsstoppades.