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World’s oldest bank faces its end

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The world’s oldest bank, Italy’s Monte dei Paschi di Siena, founded in 1472, could be swallowed by rival UniCredit after performing poorly in a stress test

The bank’s performance was worse than any other in a test of its financial health by European regulators, the latest dark chapter in a saga of failed deals, financial mishandling, criminal wrongdoings and even a mysterious death.

The test revealed a severe recession would effectively destroy the bank’s capital – news which has forced the Italian governments hand.

UniCredit, one of Italy’s largest banks, said last month that plans were being made to buy Monte dei Paschi, on the condition that the government keep all the bad loans.

Downfall shrouded in controversy

In 2013, as police investigated allegations that bank executives hid losses from regulators and shareholders, Monte dei Paschi’s head of communications was found dead in an alley below his window in an apparent suicide.

Officials did not find conclusive evidence of any wrongdoing.

Then, in 2019, several Monte dei Paschi executives were convicted of illegally using complex derivatives to cover up bank problems. They have since appealed.

The news comes amidst Italy’s prolonged efforts to rebuild its economy

Mario Draghi, the Italian prime minister and former president of the European Central Bank, has been pushing for reforms which could drag the country out of its slump.

Italian PM Mario Draghi

Monte dei Paschi’s termination “would free resources, time and political capital for more important issues,” says Lorenzo Codogno, a former chief economist at the Italian treasury who is now an independent consultant.

“There is strong political pressure to find a solution as soon as possible”.

Banks with similar issues to Monte dei Paschi would have been sold long ago, but because of the city’s historical ties to the bank, some citizens are reluctant to see it go. The sale to UniCredit is likely to lead to as many as 5,000 job cuts, a third of the total, according to Italian news reports. It remains the city of Siena’s largest private employer, and few banks across the world are as interwoven in the fabric of the city as Monte dei Paschi once was.

The potential sale to UniCredit is now an issue in city and parliamentary elections, with many politicians calling for the city to move on from its economic and psychological connections with the bank.

Enrico Letta, former prime minister of Italy who is now running for office in Siena, argues that its time and tide the city invest in other avenues, like healthcare.

“Siena wanted to be the capital of finance, Siena can be the capital of life sciences,” Mr Letta said.

“We have to give Siena a new mission”.

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Warner Brothers & Discovery considers splitting up to boost stock value

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Warner Bros Discovery is considering a strategic breakup to enhance its stock performance, according to a Financial Times report.

The potential move aims to unlock value by separating its media assets from its reality TV and lifestyle businesses.

This decision follows pressure from investors to improve stock performance, amidst challenges in the media industry #featured #trending

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Investors worldwide grow increasingly optimistic about Trump winning the election

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Investors are increasingly optimistic about Donald Trump’s potential re-election, prompting a resurgence in the so-called ‘Trump trade’.

Market participants are closely monitoring Trump’s political strategies and public sentiment, influencing their investment decisions.

Kyle Rodda from Captial.com joins to discuss all the latest.

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Netflix expands use of ads despite slow subscriber growth

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Netflix is intensifying its efforts to introduce an ad-supported tier amidst a plateau in subscriber growth.

The streaming giant hopes to attract new users and boost revenue by offering a cheaper alternative that includes advertisements.

This move marks a significant shift from its traditional ad-free model, reflecting Netflix’s response to competitive pressures and evolving consumer preferences.

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