Europe

Italy bails out Monte dei Paschi after it fails to get cash

Associated Press
Published | Updated

A man passes by a stock exchange data monitor in Milan, Italy, Thursday, Dec. 22, 2016. Italian bank Monte dei Paschi di Siena edged closer to a state bailout Thursday with its capital raising efforts falling short of the 5 billion euros ($5.2 billion) needed to stay afloat. Parliament has approved 20 billion euros to shore up Italy’s troubled banks, with Monte Paschi, the country’s third-largest lender, by far the most vulnerable after it was the worst-performer in this summer’s EU stress test. (AP Photo/Luca Bruno) (The Associated Press)

A man walks next to a Monte Dei Paschi di Siena bank branch in Milan, Italy, Thursday, Dec. 22, 2016. Italian bank Monte dei Paschi di Siena edged closer to a state bailout Thursday with its capital raising efforts falling short of the 5 billion euros ($5.2 billion) needed to stay afloat. Parliament has approved 20 billion euros to shore up Italy’s troubled banks, with Monte Paschi, the country’s third-largest lender, by far the most vulnerable after it was the worst-performer in this summer’s EU stress test. (AP Photo/Luca Bruno) (The Associated Press)

The Italian government is bailing out Monte dei Paschi di Siena after Italy's third-largest lender failed to raise the 5 billion euros ($5.2 billion) needed to stay afloat.

The government passed the bailout decree early Friday. Parliament has approved a 20 billion-euro fund to guarantee the stability of Italian banks, with MPS the most vulnerable.

Shares in Monte dei Paschi were suspended Friday on the Milan stock exchange.

MPS said late Thursday it hadn't secured a key anchor investor to pump money in, and that its efforts to swap debt for equity had netted only 2.45 billion euros, setting the stage for the government bailout.