A Plan to Rewrite the Ending of Italy’s Monte Paschi Saga

Banca Monte dei Paschi di Siena SpA is the longest-running soap opera of Italian finance. Tracing its roots to 1472 as a funder of agricultural and commercial activity in the Republic of Siena, the bank later expanded throughout the peninsula. Fast forward a few centuries, and Paschi had grown into one of Italy’s biggest lenders by the time an ambitious expansion just before the 2008 financial crisis set the stage for tragedy. With Paschi reeling from billions in losses after pricey deals, top managers engaged in actions that would see them tangled up in years of legal proceedings. In 2017 the state took a controlling stake in the bank.

Now, Italy’s government aims to rewrite the ending by merging Paschi with a rival, which would create the country’s third-biggest lender while giving Prime Minister Giorgia Meloni bragging rights for fixing a seemingly endless problem that various predecessors had failed to resolve.