ROME: The Italian parliament has approved a government plan for a possible €20bn (£16.8bn) bailout of the country’s banks. It is likely that the Italian Treasury will have to rescue Italy’s third largest lender, Monte dei Paschi, by the end of next week. The rescue fund will be used to prop up other banks as well.
Earlier, Monte dei Paschi revealed that it could run out of funds by next April, using up nearly €11bn (£9.2bn) worth of financial assets by then. Previously it had said it had the funds to stay afloat for 11 months. It added that by next May, it could burn through even more – €15bn (£12.6bn) in total. Founded in 1472, Monte dei Paschi is said to be the oldest surviving bank in the world.
The bank has suspended trading in its shares, which fell sharply again on Wednesday to their lowest level since the bank’s stock market flotation in 1999. Monte dei Paschi failed a European Union stress test in July because it has billions of euros of risky loans on its books, made to clients who cannot afford to repay them.
