Four sources have confirmed that Italy aims to restrict Monte dei Paschi’s liquidity needs at roughly 2.5 billion euros ($2.6 billion) while it negotiates a new strategic plan for the state-owned bank with European Union regulators, which will be published next month.
MPS (BMPS.MI) had set its proposed capital raising at 2.5 billion euros under a previous plan which is currently being reviewed by Chief Executive Luigi Lovaglio.
The Tuscan bank has warned that economic shockwaves from Russia’s invasion of Ukraine could have an impact on its capital.
MPS is expected to tap investors in October, leaving it a tight window before markets start focusing on general elections next year.
The European Central Bank will not assess whether the MPS cash call is adequate for its capital needs until June.
An Italian appeals court this month acquitted banking executives charged with helping the Tuscan bank hide losses through derivatives.
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