Third biggest bank to discuss capital shortfall


Italy:Banca Monte dei Paschi di Siena, Italy’s third largest bank by assets, will this week unveil a plan to shore up its capital to meet regulatory demands.

The European Banking Authority’s stress test last year found Monte dei Paschi had a €3.27 billion capital shortfall and gave it until the end of this month to find fresh funds. In recent months the Siena-based bank has reduced the shortfall to about €1 billion by selling assets and optimising its risk-weighted assets.

It will hold a board meeting tomorrow to discuss its strategy for plugging the shortfall, and on Wednesday will make the plan public.

While Monte dei Paschi is considerably smaller than UniCredit and Intesa Sanpaolo it is viewed as “systemic” for Italy. The government would step in if needed to keep it solvent.