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STOCK IN MONTE dei Paschi di Siena tumbled again last night, as investors feared the troubled Italian bank’s efforts to find billions of euro quickly are all but doomed.
The world’s oldest bank and Italy’s third-biggest, BMPS is racing against the clock to raise €5 billion or face a government bailout.
It announced late last night that a debt-for-equity swap offer raised slightly over €2 billion.
The stock fell to a record low of €15 in morning Milan trading, before rebounding and then dipping again to finish the day – several hours before the debt-for-equity results were announced – 12.08% lower.
Company directors held a crisis board meeting that ran late into the night.
“Markets wait with bated breath the latest on Monte dei Paschi’s struggling recapitalisation efforts to avoid collapse,” said Michael van Dulken at Accendo Markets.
The bank itself has admitted it has only four months’ worth of liquidity left.
If the bond conversion plan falls short, “an official bailout request for the bank is likely”, Van Dulken said.
The results of the capital increase are to be released today.
But the bank late last night acknowledged that “benchmark investors” had failed to show interest. It had been hoping for a big takeup from Qatari, Chinese or US funds.
“The weak appetite rings the alarm bell as the year-end deadline approaches at a threatening speed,” said Ipek Ozkardeskaya, senior market analyst at LCG.
“Failure to save the bank could aggressively shake up the Italian and the European banking sector.”
Crisis
BMPS is at the heart of an Italian banking crisis which has cost it over 80% of its market capitalisation in the past year, and it posted the worst results in a stress test in July by the European Banking Authority.
Last week it launched a last-ditch attempt to find, through private investors, the funds the ailing lender needs to shore up its balance sheet and stave off a government intervention.
The plan entails selling off €27.6 billion in bad loans.
A first debt swap offer raised over €1 billion.
Monte dei Paschi needs to complete the €5 billion funding drive by the end of December after the European Central Bank refused to grant its request to extend the deadline to mid-January.
New Italian Prime Minister Paolo Gentiloni confirmed last week that the government was prepared to come to its aid if the private rescue fails.
Too many banks
If it came to that, it would use a move known as “precautionary recapitalisation”, meaning shareholders and holders of junior bonds, a risky class of debt, must contribute to saving the bank.
Yesterday, the Italian parliament approved Gentiloni’s plan to set aside €20 billion to help Italy’s ailing banking sector which is buckling under bad loans estimated at a combined €360 billion, around a third of the eurozone’s total.
But analysts said this is not enough to sort out Italy’s banking problems.
“Whatever happens in the next few days, whatever plan is implemented won’t resolve the underlying problem in Italy, which is it has too many banks and too much bad debt, across the entire sector,” said Michael Hewson at CMC Markets.
Data compiled by Bloomberg suggest that Italian banks need at least €52 billion to clean up their balance sheets.
But Finance Minister Carlo Padoan said yesterday that the Italian banking system “is solid, even if there are some crisis situations”.
He said the funds set aside would strengthen the system’s capacity to “consolidate and develop”, in remarks to parliament. The €20 billion are “sufficient”, he said.
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Shouting from the opposition benches is the easiest job in Politics.
@Paul Potts: I DONT AGREE WITH THAT
@Paul Potts: Troll
@Paul Potts: I disagree. Not turning up for 3 years, on full pay, is even easier.
@Diarmuid Hehir: How is it trolling? Having to implement a manifesto that you were elected on in any democracy is far more difficult than complaining about someone else’s from an opposition bench. I personally want to see some of the left parties put in positions of power and lets see how they handle managing the purse.
@Paul Potts: couldn’t do any worse than bankrupting the country. That’s what the responsible right have given this country.
@Paul Potts: wonder what Putin would do with the whole worthless lot of them?
@Diarmuid Hehir: well spotted
@finbarr quirke: OOOOORRRRRDDDDDOOOOORRRRR
@Paul Potts: Is it to see if they can do what it says on the tin, Or is it because you want to see them fail?
@Diarmuid Hehir: troll
This is a wise decision on their behalf. Their vote comes largely from the left so supporting ffg would have been a costly mistake. It’s up to the greens now to rule out ffg or they will be annihilated in the next election.
@Ruairi Colton: absolutely spot on. if the greens join FFG. Their finished.
@Ruairi Colton: I would disagree with that. I know a number of people who voted SD based on them being a centrist party, slightly left of centre, but centrist all the same.
Those people wouldn’t vote for Sinn Féin in a millions years. So their only other option is to revert to Fianna Fáil or Fine Gael or centrist independents.
@Ruairi Colton: it would be good for the country, all you need to do is spend beyond our means like SF promises and they’ll have done a great job, our grandchildren can pay it back
@talksense: social democrats have three policies, (1) if it moves tax it,(2) if it keeps moving regulate it, (3) if it stops moving subsidise it.
@Feardorcha Ó Maolomhnaigh: the social democrats picked up their seats in a large part due to sf transfers. They obviously dont see themselves as centrist as they have ruled out ffg. They are however open to talking to the greens and sf. What does that tell you.
@Ruairi Colton: correct, but I think you will find the Greens are the weak link, they already have one leg under the FF/FG blanket!
@talksense: Our grandchildren have a FFG debt already!
Jesus wept, what you’re describing has already happened.
@Ruairi Colton: The Greens loves been in power, with there wacky solutions for the Country.
@talksense: The Difference talkNosense, is the money they would spend beyond their means would go to help those who need it, not to the banks, wealthy elites and the people who donate huge sums to your party for political favours!
@Cormac Laffan: Yes it has already happened -But Talk No Sense is living an alternative reality. He hasn’t realised yet that FG/FF had lost the election.
@Feardorcha Ó Maolomhnaigh: I
” I know a number of people” …. lol spoke to everyone who voted for SD’s did you? Speaking for their whole electorate? Jeez u are amazing.
I’m sure the Greens dont need to be reminded of their 2011 wipeout as a result of climbing into bed with FF. Wonder if they’ve learned from it.
@Maria Hickey-Fagan: they don’t care. If they get in, have loads of their policies implemented, and get hammered next time they will see it as a small price to pay for, as they see it,, helping to save the planet.
@Maria Hickey-Fagan: If they get into bed with Sinn Féin they will get wiped out in the next GE also. In recent years, we have consistently thrown out the minority party in coalition. What small party is going to go into coalition with any of the larger parties now?
@Feardorcha Ó Maolomhnaigh: it very much depends on how the govt as a whole does, though. Hypothetically, if they went in with SF and other parties and actually helped to improve things (I know, a lot of hypotheticals here) that would bode well for them, would it not?
@Connoroconner: that should Be the responsible and mature attitude of all parties – get into Power and implement the policies you think are best irrespective of their popularity, come what may.
It is NOT the job of an elected representative to get re-elected. Which is what our politicians spend their time doing. It is their job to govern.
If the greens go in, implement what they can and then lose seats I’ll
Respect them All the more
@Feardorcha Ó Maolomhnaigh: this one is different. If for example, SF, the left and smaller parties and some indo’s make up an alternative operation, a new program for gov will by its very nature have to include some policies from all the constituent parts. that will be radically different from the days when FG dominated and screwed Labour over, Or what FF did to the Greens. this will be a different beast – if it can work!
@Connoroconner: small price to pay? Bailing out the banks and €230,00,000,000 debt is not a small price to pay.
Absolute joke abstaining from voting. What’s the point in doing that? It should be made compulsory for TD’s to vote and have the way they voted easily display. Very disappointed with out Wicklow TD.
@Mark Edwards: maybe they are doing what their voters would want them to do
@Mark Edwards: By abstaining yesterday, in what were a series of purely symbolic votes, it allowed the SocDems to get the message across that a programme for government needs to be agreed upon by all parties forming a government. A programme for government should come before any nomination of Taoiseach.
@Mark Edwards: isn’t that what Sinn Fein are elected on up North. Abstaining.
@Ryan Kelly: By abstaining on Thursday*
@Mark Edwards: FF know all about abstaining.
@Paul Power: I fully agree. What FF did with the votes of confidence in Harris was sickening. Why become a TD and not vote? FF were made to pay for playing that game.
@Mark Edwards: you are right about FF there, but the people had the last say on that. Do you think FF had learned any lessons there?
@Angela McCarthy: Not at all.
FFG are toxic as they continue their decline every election. Will be their last time as the taxing greens prop em up again and go into obscurity again.
@Willy Mc Entire: they have there base who will vote for them and they must be benefiting from them in power
Glad to see that at least one party has some sense
MM. ‘Of course Leo….a couple of more weeks…. but we need to at least make it look like we are not just doing another confidence and supply and giving voters 5 more years of FFG
Leo ‘ so can we call it something other than Grand Coalition or Confidence and Supply – just to make it sound like it’s different
MM – Yep – will do.
Leo ‘ And the tickets – I still get the Kylie tickets next time right .
MM. Yep Leo – that’s all the important stuff agreed – lets just give it a couple more weeks before we announcing we made ‘surprising progress’ in the talks – now see can the PR and Marketing guys come up with a new name or some new way to spin the same ol sh*t to the public for 5 more years – ok.
@Dave Hammond: MM- this is so easy. The left can’t organise themselves to form a government.
Leo- I agree. Right, that’s the economy safe for another 5 years.
@Manbackonboard: that’s the economy raped for another 5years!
Despite the rhetoric from certain quarters we do indeed have the potential to move this country on from the FF / FG cycle. Social Dems are right to turn them down and so should the Greens or risk being swallowed up and spat out again. There does need to be a Green based center left alliance. Neither FF or FG have the skillsets nor intention to adapt and change to our times and the bigger picture of climate, extinction and all the transitions that are needed. All the opposition parties need to work this out.
@Stiofán Na Mara: at a risk of a disagreement with you again the greens wouldnt fix their shoe laces. Their policies are pie in the sky with no real substance and they would get into bed with anybody. Eamonn Ryan has shown himself up on several occasions as being a complete waffler and anything he does come up with of any worth is only viable in an urban if not just Dublin context. Like Leo and his cronies in FG the man is completely out of touch with life outside of Dublin. I would love to see him walk or cycle 40 miles to work
@Michael McGrath: No, they have solid policies inline with the greater European Greens and some of those policies have since been adopted by both FG and FF. And the urban v rural thing is BS. The Greens have more rural then urban candidates. Ryan spends most of his free time in the west and NW of Ireland. Id rather shift our politics to big picture as part of a global movement then the usual provincial and parochial minded idiots that have dominated here in the past. Awareness and consciousness is shifting.. so must our politics.
@Michael McGrath: And re Ryan and cycling.. He once owned a bicycle sell and repair business. And the car pool thing was completely taken out of context and used as ammo by the usual extreme elements. Please do some proper research as you clearly dont know what your talking about.
@Stiofán Na Mara: The carpool thing was absolutely not taken out of context it came straight out of the horses mouth on live t.v. He has been in interviews on t.v talking about walking and cycling and taking public transport to work.And who is the carbon tax their kiteflying going to effect the most its us in the countryside who cant walk cycle or get public transport as an alternative so that immediately creates an urban rural divide. An please do not patronise me i know very well what im talking about what do want me to do hand out medals to Eamonn Ryan because he holidays in Mayo fair play to him hes not trying to drive to work 44 miles ew every day is he, does he cycle to the West of Ireland from Dublin or take a bus, he does in his hole.So you clearly dont know what your talking about
People who voted for small parties and independents and see them refuse to enter government need to understand they wasted there vote . Opposition politicians achieve very little
@jerry slattery: Establishment politicians acheive very little. Health housing policing justice infrastructure – have their been any major achievements in these areas in the last 10 years?
Our national debt? Still 3rd biggest in the world. Our economy? Based almost entirely on windfall taxes from multinationals running money through our tax avoidance schemes.
The national finances are Built on sand and shag have we done with them? Piddled it all away.
@jerry slattery: if people didnt vote for small parties and independents FFG would have absolute power. You’d love that, wouldn’t you?
@jerry slattery: this is not just about this election. If the Social Democrats want to grow as a party they need to not jump into “power” at the first opportunity if it’s with parties with such wildly different policies. If they went into power with FF and FG they’d be going against voters’ wishes.
@jerry slattery: What about Sláintecare? Primarily an opposition initiative.
Sense prevails. Great to see!
Well done social democrats whats the point is going with FFFG they have nothing but wreck the country
There is no way any party will get the numbers needed. It’ll be back to the polls to try again
Wasted vote as they wont go in with anyone #useless #nonedemocratic
@Galwaygogo: I’m pretty sure it just says FF and FG?
@Ryan Kelly: No the Soc Dems have intention in going into government with Sinn Fein… why would they SF would eat them for lunch … likewise Sol-PBP … there a lot shadow boxing going on….
If the Soc Dems and Sol-PBP were serious about a Coalition of the left they could have least issued a statement in the past week stating in principle they would support a SF lead coalition .. while caveating it with the usual “ subject to an agreed Program for Government”… but they have not ….
The reality is SF , Soc Dems and Sol-PBP and I4C and to a lessor extinct the Greens are all fishing in the same voter pool … and historically all small parties get killed in the next subsequent GE ….. ask Labour they know all about this .. so it’s all about survival ..
FF were desperate to get the SOCDEMS in as they see them as a credible threat. Twill be a bitter pill to swallow for them. Greens now facing annihilation if they go in. But Ryan is desperate for power.
Well done,the greens need to come out and rule out FF FG as well, or they will suffer in next GE whenever it is,just look what supporting FF FG did to independents, labour,they got hammered and the greens were wiped out in 2011 remember.
@@mdmak33: well what govt do u want to see then. All u here on here is parties ruling out this group or another !. We need some form and the left just don’t have the numbers
Only thing is another election and let the left run the country. It will be spend spend and pi@@ing the UK off everyday about a broader poll. Then back to another crash. I went through the last one and I’ve made sure I won’t suffer in the next one. I’ll sit on the sidelines like all the TDs they will be blaming everybody but themselves
@@mdmak33: If the greens had the bottle to stand up and resist FF/FG, it would be game set and match to the left alternative.
@Angela McCarthy: how
Happy to hurl from the sideline. A wasted vote . Joke of a party
@smart cat: Leo has stated that he wants to be in opposition…
@smart cat: joke of a party? Why on earth would they prop up a government whose policies are diametrically opposed to their own?
@Anne Marie Devlin: yes but he was in govt so a period in opposition benches is needed and a lot of parties in Europe do it. Will Leo be here next year ?. ( not a FG voter )
Very clever and a very obvious decision to make. Let’s see will the greens follow. And leave FF FG with the independents. See how that works for them
Good. But they still need to support SF in the next vote. They did benefit A LOT from transfers and it would be a shame to not see that repeated next time….
@The Risen: they really didn’t, bar the TD in cork which is disappointing. To many left groups. SF voters need to number 2 the Socdems where their only running one candidate.
@The Risen: if SF get their tactics right next time there won’t be as many transfers. Even this time, Greens and SD don’t seem to have too many seats that depend on strong SF transfers:
Nice to see a left party stick to their principles
It wont matter. The Greens and a few Indo’s will make up the numbers for that Grand Coalition that they havent yet admitted to planning yet.
Bring on the election. As people were fed up with the last government and MM (FF), if this bickering among them does not stop then they will get an even angrier vote.
Well seeing as the RA has only gone away you phone them ask for their advice
@trebloc01: or you can always get the same info at the Galway Tent.
Same old same old, FFG supported by the Greens, no doubt adopting the Sinn Féin election mandate and claiming credit for it, 100% against what the people voted for.
This is just a big hold up so that leo will qualify for his taoiseach pension. As soon as this happens see how quickly a government will be formed.
They won’t go in with SF regret giving them my second vote now
It will be FFGreens, there is no way on earth will they risk another election & the Shinners get 50 seats. Give it time, FFGreens
If ff and fg can decide only to talk to like minded parties, surely social Democrats are entitled to do the same. Don’t forget they along with greens depended on sf transfers for many of their seats.
@Leonard O’mahony: not as many as you might think:
“https://irishgeneralelectionresults2020.wordpress.com/2020/02/17/whos-afraid-of-losing-their-sinn-fein-transfers/”
So the Soc Dems want a SF government?
@PMBinARG: rather a SF government than Mehole and Leo the liar with Doe EY Ryan holding them up
@PMBinARG: yip, they might know something you don’t!
The Neo Lib Fundamentalists are in full swing acros the MSM these days. How much death and destruction have they facilitated via th Shannon stopover for US military interests?
Fairplay
The problem with Socialism is you eventually run out of other peoples money …… M Thatcher
@Tony Shaw: Quoting that monster Thatcher won’t earn you a lot of friends here Tony.
So will Mary Lou lecture them on how wrong they are to rule it out?
@Tony McCoy O’Grady: Ha ha, now isn’t that a lovely piece of poetic justice!
Hope the SF voters given the Socdems number 2 where they won’t be running a second candidate. Need to consolidate the left . There are to many left candidates.
@Diarmuid Hehir: since when did sf become a party of the left? Their policies in water and wealth taxes are distinctly of the right.
@John Mulligan: they’re more left that either FFG or Labour. It’s a start.
The greens will go in with the devil
Smartest thing they could do is to form an alliance with Labour, to create a bloc that represents working people in the Dail.
(Cue a load of shinnerbots whose handlers have managed to steal that space with their magic money tree shyte).
@John Mulligan: labour.. working class…
I would say it’s the hardest…sitting there totally impotent and all the time the last word goes to those sitting on cabinet chairs…don’t be kidded with this guff that opposition doesn’t want power…its a line spouted by idiots or people who take the electorate for idiots…
Irrelevant
The Social Democrats should be very careful. If they are perceived as holding up the formation of the next Government, they will be punished. Personally, I feel it’s incumbent upon Fianna Fáil and Sinn Fein to form the next Government. Both stood for change. Fine Gael stood on their record. Simple as.
have your say