Bank of Italy oversight chief
Carmelo Barbagallo told a joint session of the House and Senate
finance committees Tuesday that "the application of the
(20-billion-euro 'save-savings') decree to the Monte dei Paschi
di Siena case represents a turning point for the banks and
removes, also in the perception of the market, an elevated risk
for the entire Italian system". The government was set to use
five billion euros of the funds earmarked in the decree for MPS
before the European Central Bank surprised Italian officials by
saying 8.8 billion would be needed. MPS is being rescued via a
"precautionary recapitalisation" to be negotiated with Brussels
and Frankfurt after its very high level of non-performing loans
(NPLs) risked pushing it to the wall.
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