MPS decree 'removes system risks' (2)

(ANSA) - Rome, January 17 - 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.