The Italian government moved closer to a potential rescue of lenders including Banca Monte dei Paschi di Siena SpA by seeking permission from parliament to increase the nation’s public debt by as much as 20 billion euros ($21 billion).
The plan is aimed at providing a backstop to the banking system “through public guarantees in order to restore their short- and medium-term lending ability,” Finance Minister Pier Carlo Padoan said following a cabinet meeting Monday night. The funds could also be used “for capital-strengthening programs of banks within recapitalizations that include the sale of shares,” he added.
Source: Bloomber (20 December 2016)