Monte dei Paschi di Siena (MPS)
lender on Tuesday sent its capital plan to the European Central
Bank (ECB) for approval, sources close to the operation told
ANSA Tuesday.
The plan calls for a five-billion-euro capital increase and
the securitization of 10 billion euros' worth of non-performing
loans (NPLs) with help from Italy's private Atlante fund that
was set up by the financial industry earlier this year to shore
up banks burdened by toxic loans and circumvent EU rules against
public aid.
The ECB is expected to respond by Friday, the sources said.
The ECB's banking oversight committee meets tomorrow in
Frankfurt.
"We are confident there will be a market solution... I hope
there will be no State intervention," spending-review
commissioner and government economic adviser Yoram Gutgeld said
earlier in the day.
The market solution would involve an initial phase in which
MPS would get rid of some of its NPLs, followed by a
recapitalization.
Shares in the troubled lender were suspended on excessive
volatility in Tuesday trading after tanking 8% to 0.28 euros
Monday. The lender is set for the outcome of an ECB stress test
and the release of its half-yearly results on Friday.
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