Another 20 days to try to save Monte dei Paschi with a market solution, that is with the problematic 5 billion capital increase that has been in the pipeline for some time. The CEO of the Sienese bank, Marco Morelli, told the board yesterday that he had asked the ECB for a 20-day extension (i.e. until 20 January) to complete the recapitalization due to the government crisis that changed the context where the operation was to take place.
It is probable that Frankfurt, which will meet its Supervisory Board today, will lend a hand to Monte by lengthening the times of the capital increase but, even so, the road to rescue through a market solution is and remains very difficult, also because the international funds that should intervene as anchor investors (Qatar in the lead) are taking time waiting to understand how the Italian political situation will evolve.
That's why the Treasury has a backup plan ready to save Mt. Pier Carlo Padoan's plan B involves strengthening the public presence in MPS with the green light from the European Commission which does not want to take responsibility for causing a large bank to fail with obvious systemic risks not only for Italy but for the entire system European banking.
The cocktail of measures prepared by the Treasury to save MPS is rich, but to serve it we need a government in the fullness of its powers that takes responsibility for it and approves the consequent decree. This is why the lengthening of the times asked of the ECB can help.
As things stand, the most popular solution among the various hypotheses imagined by the shareholder Treasury is that of repurchasing the subordinated bonds in the hands of savers and converting them into shares. But the problem of problems, beyond the technical and political aspects, is that of the repurchase price of bonds held by savers. And of course that of having a government that signs the decree.
