Board of troubled Italian bank MPS seeks fresh capital

Published December 11, 2016

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.

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