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You can find the current article at its original source at http://www.theguardian.com/business/live/2016/dec/07/italian-banks-monte-de-paschi-renzi-markets-bonds-business-live
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| Version 0 | Version 1 |
|---|---|
| Italian bank rescue hopes push markets higher – business live | Italian bank rescue hopes push markets higher – business live |
| (35 minutes later) | |
| 8.34am GMT | |
| 08:34 | |
| European stock markets are all rallying this morning, with banking stocks boosted by Italian bailout hopes. | |
| The main indices are up around 1%, pushing the FTSE 100 up by almost 60 points to 6837. | |
| La Stampa’s report that Italy may seek European help for its banks is cheering the City: | |
| Italy's @LaStampa reporting Rome will seek #Spain-style bank bailout from #eurozone rescue fund. Big if true. #MPS https://t.co/Nw6eQG9zNN | |
| Shares in Monte dei Paschi have surged 10% on reports Rome could seek an EU bank bailout https://t.co/M0Bc7lT69z pic.twitter.com/FiTwKxl4b9 | |
| In London, mining stocks are also gaining ground, with Rio Tinto and Antofagasta both up 4%. | |
| 8.18am GMT | |
| 08:18 | |
| Monte Dei Paschi shares leap on bailout hopes | |
| Shares in Monte Dei Paschi have jumped by 9% at the start of trading in Milan, on hopes that Italy can pull off a rescue package. | |
| Other Italian banks are rallying too, driving the whole sector up 3%. | |
| Traders are reacting to La Stampa’s claim that Italy could seek a €15bn bailout (even though it’s just been denied) | |
| They’re also comforted by Reuters’ overnight report that Italy could take a €2bn stake in Monte dei Paschi, in a bid to: | |
| One source told Reuters that: | |
| “It’s a de-facto nationalisation with a strong presence by the state that can attract other investors and allow the transaction to be completed. | |
| 8.07am GMT | |
| 08:07 | |
| Italian bonds strengthen | |
| Italian government debt is rallying this morning, pushing the yield (interest rate) on its 10-year debt down to 1.91%, from 1.97%. | |
| That has narrowed the gap between Italian and German borrowing costs - a key measure of stress in the eurozone. | |
| #Italy 10y risk spread over #Germany continues to shrink following La Stampa report Italy to ask for €15bn ESM loan for Paschi, other Banks pic.twitter.com/VD1Euz1pTL | |
| Updated | |
| at 8.07am GMT | |
| 8.02am GMT | 8.02am GMT |
| 08:02 | 08:02 |
| La Stampa: Italy to ask for €15bn ESM loan | La Stampa: Italy to ask for €15bn ESM loan |
| Italy’s La Stampa newspaper is reporting that Rome is considering seeking a €15bn loan from European authorities, to recapitalise its banking sector. | Italy’s La Stampa newspaper is reporting that Rome is considering seeking a €15bn loan from European authorities, to recapitalise its banking sector. |
| According to the report, Italy would use the funds to shore up several banks, not just Monte dei Paschi. | According to the report, Italy would use the funds to shore up several banks, not just Monte dei Paschi. |
| In return, Rome would have to commit to tightening its 2017 budget (which might be tricky, given the political void at present). | |
| BBG, citing La Stampa, says 15 billion eur ESM loan would allow for recapitalization of Paschi, Pop Vincenza, Veneto Banca, Carige. | |
| It’s an intriguing idea, with one problem....it’s just been denied by Italy’s Treasury department. | It’s an intriguing idea, with one problem....it’s just been denied by Italy’s Treasury department. |
| *ITALIAN TREASURY DENIES PREPARING REQUESTS TO ESM ON BANKS - BBG | *ITALIAN TREASURY DENIES PREPARING REQUESTS TO ESM ON BANKS - BBG |
| But how could it happen? | But how could it happen? |
| These funds would come from the European Stability Mechanism (ESM), which is Europe’s bailout fund. Spain took a similar loan a few years ago, which helped it avoid falling into a financial crisis. | These funds would come from the European Stability Mechanism (ESM), which is Europe’s bailout fund. Spain took a similar loan a few years ago, which helped it avoid falling into a financial crisis. |
| The attraction for Italy would that such a loan would come with fewer strings attached than a full-scale bailout. But there would still be some conditions, and monitoring of its banks by Brussels. | The attraction for Italy would that such a loan would come with fewer strings attached than a full-scale bailout. But there would still be some conditions, and monitoring of its banks by Brussels. |
| If Italy turns to ESM, here's the relevant toolkit for (indirect) bank recapitalisation. https://t.co/lcGnRHZz37 pic.twitter.com/K2gWnBsGVr | If Italy turns to ESM, here's the relevant toolkit for (indirect) bank recapitalisation. https://t.co/lcGnRHZz37 pic.twitter.com/K2gWnBsGVr |
| Updated | |
| at 8.09am GMT | |
| 7.42am GMT | 7.42am GMT |
| 07:42 | 07:42 |
| The agenda: Italian banking rescue, euribor fines? | The agenda: Italian banking rescue, euribor fines? |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Three days on from Italy’s constitutional referendum, the future of the country’s weaker banks still hangs in the balance. | Three days on from Italy’s constitutional referendum, the future of the country’s weaker banks still hangs in the balance. |
| Monte de Paschi di Siena (MPS), the oldest and most troubled of the Italian banks, is making a final push to persuade investors to back its €5bn cash call. | Monte de Paschi di Siena (MPS), the oldest and most troubled of the Italian banks, is making a final push to persuade investors to back its €5bn cash call. |
| But prime minister Matteo Renzi’s resignation may force Monte dei Paschi into seeking some form of help from the state, as investors have been spooked by the uncertainty gripping the Italian political system. | But prime minister Matteo Renzi’s resignation may force Monte dei Paschi into seeking some form of help from the state, as investors have been spooked by the uncertainty gripping the Italian political system. |
| Reuters reported last night that the Italian government could take a €2bn controlling stake in MPS, which would lift the government’s stake up to 40%. That could also provide compensation for the small retail investors who hold some of its bonds. | Reuters reported last night that the Italian government could take a €2bn controlling stake in MPS, which would lift the government’s stake up to 40%. That could also provide compensation for the small retail investors who hold some of its bonds. |
| And there is still talk that a public rescue plan could be cobbled together by the weekend, possibly even with some fund from Europe? All may become clearer today... #NoPromises | And there is still talk that a public rescue plan could be cobbled together by the weekend, possibly even with some fund from Europe? All may become clearer today... #NoPromises |
| Also coming up today: | Also coming up today: |
| The European Commission could hit HSBC, JPMorgan and Crédit Agricole with multimillion-euro fines later today for rigging the Euribor interest rate benchmark. | The European Commission could hit HSBC, JPMorgan and Crédit Agricole with multimillion-euro fines later today for rigging the Euribor interest rate benchmark. |
| Australia has sent a shiver through the global economy by reporting that its economy shrank by 0.5% in the last quarter; only the fourth such decline in 25 years. | Australia has sent a shiver through the global economy by reporting that its economy shrank by 0.5% in the last quarter; only the fourth such decline in 25 years. |
| Here’s how the story unfolded: | Here’s how the story unfolded: |
| On the economic front, we get: | On the economic front, we get: |
| Updated | Updated |
| at 7.49am GMT | at 7.49am GMT |