Friday, July 29, 2016

Italian Banks in Deep Trouble #BankingCrisis

Monte dei Paschi di Siena is pushing for a risky privately funded bailout in order to prevent a "bail-in" under new European bank rules. A bail-in that could trigger change and possibly revolution in Italy.

Italians, heavily invested in sovereign debt, will be big losers in banking crisis/contagion. The real question is who's foolish enough to throw money into a private bailout fund that will most likely fail? Talk is cheap and money is dear. A high probability loser's bet won't find a lot of takers in the private sector.

Headline: Monte dei Paschi close to finalizing cash call guarantors: source

Monte dei Paschi (BMPS.MI) is close to finalizing a consortium of eight banks to guarantee a 5 billion euro ($5.55 billion) cash call the lender plans to carry out to strengthen its balance sheet, a source close to the matter said.

Beyond global coordinators JP Morgan (JPM.N) and Mediobanca (MDBI.MI), the consortium is expected to include Goldman Sachs (GS.N), Santander (SAN.MC), Citi (C.N), Credit Suisse (CSGN.S), Deutsche Bank (DBKGn.DE) and BOFA Merrill Lynch (BAC.N).



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