The world’s oldest bank, Monte dei Paschi di Siena, is in danger of being liquidated by the Italian government, unless they can come up with enough money to pay back their bailout. The bank needs to raise about $4.1 Billion in capital in order to pay back money it borrowed from the government to stay in business. The foundation which runs the bank had come up with the idea to sell additional shares for the bank that could help raise the needed money, but that plan has been put on the back-burner for now.
Monte Dei Paschi, World’s Oldest Bank, Having Financial TroublesRather than issue a share of sales in 2013 to raise the $4.1 Billion, the majority of the bank’s shareholders voted to put off the stock sales until around May 2014. The problem here is that this puts the bank at more risk if it is unable to raise the required funds in time to pay off the government. The share holders do not seem to think that the bank will have any issues raising the money, as nearly 80% of the shareholders agreed on waiting until the May time frame. Only time will be able to tell, it seems, whether or not this risky move will pay off for the bank.
The bank, which has been in continual existence since 1472, is part of local Italian heritage. Many people see the bank as a staple in Italian culture, and the bank does a lot to stay in the good graces of the people. There are many who do not want to see the bank become an asset of the Italian Government, in part because of the rich history, but also because the bank currently gives much of its profits to charitable work.
Featured image from the Monte dei Paschi website.
Monte Dei Paschi, World’s Oldest Bank, Having Financial Troubles.