World’s oldest bank asks for $3.75 billion

MILAN - Agence France Presse

Banca Monte dei Paschi di Siena’s Chairman Alessandro Profumo. REUTERS photo

Banca Monte dei Paschi di Siena, the world’s oldest bank, may be forced to request over three billion euros ($3.75 billion) in state aid, just as Italy struggles to stave off debt crisis contagion.

The Tuscan bank may ask for more than three billion euros in so-called “Tremonti bonds” to pay off a government loan agreed in 2009 and plug a capital gap, Il Sole 24 Ore business daily said yesterday.
 The lifeline would allow BMPS to pay off its earlier 1.9 billion euro state loan, as well as boost its own capital by up to 1.2 billion, the paper said.

The bonds, named after former Italian Economy Minister Giulio Tremonti, are bought by the government from banks, which have to pay interest on them.