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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Finance

Finance

World’s Oldest Bank Calls For a Bailout

Monte dei Paschi di Siena is over 544 years old and has earned the title as the world’s oldest bank. The ancient bank has caused quite a few problems for investors. However, the bank announced Wednesday that due to its failure to land an investor for its new shares it’s in need of government help.

Since it wasn’t able to secure an investor, many institutions were hesitant to invest their money into the €5 billion ($5.2 billion) the bank needed. The bank had largely based its dependency upon the investment of €1 billion from Qatar. Because that investment fell through, the bank’s only other option is a government bailout, which will be the third time the bank has approached the government with such a request.

If the Italian government were to offer aid to Monte dei Paschi, many Italians would be cleared of their savings. This is due to the fact that many of the investors that are just regular citizens. To avoid this, the Italian parliament has permitted €20 billion to fund other bank sectors throughout the country, starting with Monte de Paschi.

The rise in populism has swept through Italy after Beppe Grillo co-founded the Five Star Movement after the former Prime Minister’s constitutional referendum reform was rejected. It’s estimated that if Monte dei Paschi takes the government bailout, this could increase the wave of populism that would inevitably lead to Italy leaving the European Union.

However, that’s only a speculation. Italy has no intentions of leaving the EU right now. To do so would mean that Italy would have to first change its constitution, a fact that is no small feat. Although Monte dei Paschi seems to only be the beginning of a calamity for Europe, it’s safe to say the Eurozone isn’t headed for ruin just yet.


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