Italy

Update: the FT writes that the Italian govt set to take a stake between 50% and 70% in Monte dei Paschi, up from the current 4% stake, as part of the government's third bailout in as many years. As the FT adds, "the government rescue, which had long been resisted in Rome, is designed to draw a line under the slow-burn crisis in Italian banking that has alarmed investors and become the main source of concern for European financial regulators."

It remains to be seen if Germany, long a critic of state bailouts, will be as agreeable.

Total chaos reigns in European banking stocks this morning as Monte Paschi shares crash, soar, and plunge amid on-again, off-again bail-in, bail-out headlines (and stocks and bonds hit record lows). However, Italy is now not alone as Spanish banks are also bloodbathing following a European Court ruling on mortgage fraud went against them.

In early European trading, shares of Italy's third largest and most troubled bank were halted after crashing 17%, dropping to fresh all time lows, after the bank warned it is not only insolvent, but its liquidity could run out far sooner than expected.

On Sunday, when we previewed the latest last-ditch effort to rescue Italy's third largest bank when Monte Paschi launched a 4-day attempt to sell €5 billion in equity to anchor and retail investors, we said that "in the otherwise quiet pre-Christmas week, all eyes will be on Monte Paschi, and specifically the intentions of the alleged anchor investor, Qatar (and perhaps a handful of Chinese banks), to determine if Italy's banking crisis is "fixed" if only for the near future, or if the new year is set to begin with another "risk flaring" episode out of the Italian banking sector as Monte Pa

Bail-Ins Coming To Italy? World's Oldest Bank "Survival Rests On Savers"

The world's oldest bank and Italy’s third biggest bank, Monte dei Paschi di Siena (MPS), is making a last-ditch emergency attempt as the year ends to convince tens of thousands of ordinary Italian savers to help it escape state hands.

Source: Wikimedia.org