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Bank of Italy, bourse watchdog monitoring MPS

Uncertainty surrounding 3-bn-euro capital increase

30 December, 13:20
Bank of Italy, bourse watchdog monitoring MPS (ANSA) - Rome, December 30 - Oversight authorities from both the Bank of Italy and Milan bourse watchdog Consob have launched "coordinated monitoring" of Monte dei Paschi di Siena (MPS) following news at the weekend that the troubled Italian bank was delaying a crucial three-billion-euro share sale until May.

Stocks plunged nearly 6% as the bourse opened the week Monday, just a percentage point shy of the limit before trading is frozen. Shortly after shares recovered the loss and by midday were up 1.04%. Investors have been spooked by uncertainty surrounding a turnaround plan for MPS, Italy's third-largest and the world's oldest. MPS management had argued strongly to complete the cash call in January but shareholders forced a delay until mid-May. If it fails to generate enough capital to repay State aid, the bank risks nationalization.