Europe

Board of troubled Italian bank MPS seeks fresh capital

The board of troubled Italian lender Monte dei Paschi di Siena is meeting as the bank searches for a way to repair a 5 billion-euro hole in its finances.

If MPS cannot raise additional capital from private investors in the coming days, it could need an Italian taxpayer-funded bailout.

The bank's troubles are one of the urgent tasks confronting the new Italian government to be headed by premier-designate Paolo Gentiloni, Italy's former foreign minister who was named Sunday to lead the country.

A bailout could be politically explosive, because European Union rules could mean that bank bondholders must take losses as a condition of pouring in taxpayer money. Many bondholders are small-time investors who may not have been fully aware of the risks. The government could look for a way to compensate them.