Learn More About Monte Paschi Crisis

It’s crunch time for embattled Italian lender Banca Monte dei Paschi di Siena SpA.

All eyes are now on the Italian government, after it became clear late Wednesday that BMPS had failed to raise enough money to stave off a collapse. A state bailout is inevitable and could be announced as soon as Thursday, according to media reports.

Shares in BMPS sank as much as 10% on Thursday morning, but lately were trading in the green.

Monte dei Paschi has in recent weeks raced to raise €5 billion ($5.2 billion) from private investors to shore up its balance sheet and avoid being wound down by European regulators. However, it has run into major challenges. For example, uncertainty following the Italian referendum in early December dissuaded key investors to take part in the private rescue plan.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.