Wednesday, December 21, 2016
Shares in the world's oldest bank are recovering as a bailout moves closer
Shares in Banca Monte dei Paschi di Siena crashed in early trading Wednesday after the bank warned over its ability to meet its day-to-day expenses.
The bank said it would run out of liquidity in four months, rather than the 11 months that investors had previously thought.
Shares plummeted and were briefly suspended as a result of the drop. Here is the chart:Investing
Monte dei Paschi recovered in midmorning trade, however, and stock was briefly positive after Italy's lower house of Parliament approved plans to borrow up to €20 billion to prop up the ailing banking sector.
Here's how Monte dei Paschi shares look at close to 11:50 a.m. GMT (6:50 a.m. ET):Investing.com
The Italian banking crisis is coming to a head after Matteo Renzi resigned as prime minister earlier this month. Banca Monte dei Paschi, the world's oldest lender and Italy's third-biggest bank, is attempting to raise €5 billion by the end of the year to stay in business.
The sector is carrying more than €300 billion in nonperforming loans and may ultimately need an injection of about€52 billion, according to Deutsche Bank analyst Paola Sabbione.