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Paschi Seeks State Aid as Italy Sets $21 Billion for Banks

  • Monte Paschi recapitalization effort misses bank’s target
  • New state fund seen plugging any Paschi recap shortfall
Bloomberg business news

Italy's $21B Bailout for Banks

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Italy’s government is set to rescue Banca Monte dei Paschi di Siena SpA after the world’s oldest lender failed to raise 5 billion euros ($5.2 billion) from the market, in what will be the country’s biggest bank nationalization since the 1930s.

Italy will plow as much as 20 billion euros into the country’s banks providing both emergency liquidity guarantees and capital injections, as more lenders may seek lifelines soon. Monte Paschi said in a statement it will ask the government for a “precautionary” capital increase.