Skip to content
Subscriber Only

ECB Warns Paschi on Post Referendum Liquidity in Stress Test

  • ECB cited liquidity in rejecting capital deadline extension
  • Direct funding fell by 6 billion euros end Sept. to Dec. 13
Video player cover image

Monte Paschi Bond Swap Offer Extended to Dec. 21

Updated on

Banca Monte dei Paschi di Siena SpA said the European Central Bank rejected its request to extend a capital increase into January over concerns that the Italian lender’s liquidity “is progressively deteriorating in the wake of the Dec. 4 referendum.”

The ECB said that under a negative stress-test scenario, the Siena-based bank has “a 29-day time horizon” in which it can meet its liquidity needs without resorting to new intervention,’’ according to an updated prospectus for its capital increase. The stress test scenario assumes a liquidity exit of 10.3 billion euros ($10.8 billion) within a month, according to the prospectus.