La European Central Bank gave the green light tocapital increase of 3 billion Mps. The new resources will be used by the Sienese institute - among other things - to repay the last billion of the Monti bond, the public loan which in 2012 avoided the bankruptcy of Monte. In recent days, the managing director Fabrizio Viola specified that if the ECB's green light had been "imminent" and if it had arrived "within this week", then the increase could have started "around 28 May".
However, the operation alone "does not solve the Bank's structural problems", reads the letter of authorization for the recapitalization signed by Mario Draghi. The ECB "reminds" Monte Paschi that there are two other points of the Capital plan drawn up in November "that must be implemented": the reduction of non-performing loans and restructuring, i.e. marrying a partner.
Only when it has also taken these other two steps will MPS have solved its structural problems: non-performing loans, the weak capital situation and the underperformance in terms of earnings. It is in this context that the ECB requires the Bank to be transparent with regard to its financial situation, including the potential risks and commitments to be undertaken vis-à-vis potential subscribers to the increase.
