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Italy Works to Sweeten Paschi Offer as Orcel Plays It Cool

  • Stress tests could show lender as one of region’s weakest
  • Finance Ministry may propose splitting out some parts of bank
Italy Sinks Into Political Limbo As Prime Minister Matteo Renzi Swept Away By Defeat
Photographer: Chris Ratcliffe/Bloomberg
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Italy’s government is working on a package of favorable terms that it could offer UniCredit SpA to take over Banca Monte dei Paschi di Siena SpA, as regulatory pressure builds to work out a survival plan for the troubled lender.

The nation’s finance ministry may offer additional fiscal benefits and ways to shield the new owner of the Siena-based bank -- the world’s oldest -- from legal risks, according to people with knowledge of the matter. Officials may also propose splitting off some parts of the business to make it more attractive to UniCredit Chief Executive Officer Andrea Orcel, who has been cool on the idea, the people said.