EU Wary of Italy's Plan to Spare Monte Paschi From Loan Losses

Italy wants to shield Monte dei Paschi from bad loan losses as it prepares the bailed-out bank for a sale, but faces resistance from European Union competition authorities, two sources close to the matter said, Reuters reported. Italy’s Treasury has a year-end deadline to present an outline of its strategy for getting out of the world’s oldest bank, which was at the forefront of Italy’s banking crisis until a 2017 state bailout was cleared by Brussels. Under the terms of the bailout, Rome agreed to a tough restructuring plan for Monte dei Paschi and committed to liquidating its 68% stake in the bank by the end of 2021. But despite disposing of around 30 billion euros in bad loans in recent years, the Tuscan bank still held 16 billion euros (£13.81 billion) in soured debt at the end of June, or 16% of total loans. Read more