Monte dei Paschi

The market has been preoccupied with the European Banking Authority’s 2016 stress tests results, but really there has been little to look forward to. The tests don’t go far enough to say anything meaningful about the state of European banking.

Monte dei Paschi di Siena’s share price fell 8% on Monday morning, ahead of the European Banking Authority’s 2016 stress test results.

Monte dei Paschi di Siena could be left with a capital shortfall of €4bn if it completes a sale of non-performing loans to Fondo Atlante.

Monte dei Paschi di Siena (MPS) has become a symbol of Italy’s banking woes, but a private sector salve will not end the lender’s non-performing loan (NPL) problem. A poor performance in the European Banking Authority’s (EBA) 2016 stress tests will only hammer home the size of the mountain left to climb, writes Tyler Davies.

Monte dei Paschi di Siena has been at the centre of discussions about a possible new bank investment fund in Italy, after the lender’s huge bad loan problem came to the fore once again this week.

Atlante could reach out to more potential investors after being forced to underwrite all of Banca Popolare di Vicenza’s recent IPO, but the future of larger banks remains subject to the success of structural reforms.

Monte dei Paschi di Siena is beyond the help of Fondo Atlante, according to an ECB official, but new reforms could help the bank tackle its mountain of non-performing loans.

Banca Popolare di Vicenza has been refused a listing on the Milan stock exchange after its IPO failed to attract sufficient private demand, leaving Fondo Atlante to underwrite the entire capital raise and sending Italian bank shares tumbling on Tuesday.

Investing in Italy's bank recapitalisation fund could weaken larger lenders' vulnerable capital ratios, according to Moody’s.

Kommunalbanken (KBN) are set to price the first five year dollar bond for three weeks on Wednesday while Italy’s 30 year bond was the first SSA issuance in the tenor for 2016.

Monte dei Paschi di Siena may be the ugly sister of Italian banks for investors, but it’s the Italian sovereign’s favourite son when it comes to primary dealerships.

As Monte dei Paschi di Siena’s shares gyrated last week, losing up to 34% of their value, the bank received a high honour, for a second year running — top primary dealer for Italian sovereign bonds.