Italian premier chides ECB for lack of transparency
Italy's premier said Thursday that he was taken aback by the European Central Bank's move to significantly increase the amount of money needed to save the troubled bank Monte dei Paschi di Siena.
Paolo Gentiloni said that the government would discuss the final figure with the ECB, but that such talks "do not put in discussions the tranquility, the capacity and the relevance of our intervention."
The comments echo those by his finance minister, Pier Carlo Padoan, who chided the ECB in an interview with the business daily Il Sole 24 Ore for not being transparent in how it arrived at the PS8.8 billion figure.
The government last week approved a PS20 billion fund to secure banks at risk, chief among which was Monte dei Paschi, Italy's third-largest lender, which had failed to raise enough capital on its own.
Monte dei Paschi had been trying but failed to raise PS5 billion in new capital after failing an EU stress test last summer.
Gentiloni said the higher capital requirement for the bank means the government would put in PS6.6 billion. The government has said that the PS20 billion it has earmarked remain sufficient to reinforce the banking sector, which is under pressure from a high level of bad loans that won't be paid back.
Gentiloni said that the rescue of Monte dei Paschi, which aims to prevent losses for private Italian investors many of them small savers and pensioners "will be long and complicated, we don't hide that."
"We made a strategic and fundamental decision," he added.