Monte dei Paschi, the bank world’s oldest, still kicking – Milenio.com

the disappearance of The oldest bank of the world comes not as an explosion, but as a constant decrease of trust. Savers withdraw their funds and the main investment that is needed to restart the capital of 5 billion euros to Monte dei Paschi di Siena does not come.

The deposits fell 14 percent year-on-year. The withdrawals accelerated after the defeat suffered by Matteo Renzi in the referendum, about a tenth part of the deposits came out in December.

banking regulators europeans can congratulate themselves that any infection so far is limited. The prices of swaps for non-payment of Intense Sanpapolo and Unicredit, the largest banks of Italy, not registered panic; the spreads of sovereign bonds of Italy in comparison with Germany remain unchanged. Ironically, the possibility of a State intervention helped the index of Italian banks to rise to 20% in December, which puts them on the path to the highest monthly increase since 2009.

If it qualifies as solvent, MPS will get the approval for a recapitalisation precautionary with the that would make 4 thousand 800 million euros of subordinated bonds in the capital while saving on senior debt.

In theory, the State should only intervene with € 200 million to be able to achieve the goal of Mt. But the European Central Bank may require, as a reserve a greater amount to provide 45 thousand 500 million euros of stock gross loans, with the balance in mora, 42 percent of the total loans more aggressively.

more strong on the part of the State; while there is a moral hazard, it may become the only alternative to total panic. The fate of MPS is the culmination of years of mismanagement and delay policy, not to mention the disastrous acquisition in 2008 of Banca Antonveneta.

The problems of bank of Italy does not end. While the government reported that work on a general plan of 20 billion euros to help banks in problems, Deutsche Bank recognized that the sector needs additional reserves of 50 billion.

This is not an omen for doom. Unicredit, which want to 13 billion euros, saw its stock price went up after that presented to the shareholders a plan of reform.