The ECB has reportedly given a preliminary nod to the possible appointment of Marco Morelli, head of Bank of America Merrill Lynch in Italy, as chief executive of ailing lender Monte dei Paschi di Siena. As Hayley Platt reports, if confirmed, he'll have a tough job implementing an emergency rescue plan to avert the risk of being wound down.
Marco Morelli could be returning to Italy's ailing bank Monte dei Paschi. The current head of Bank of America's Italian arm was CFO there until 2010. The European Central Bank has reportedly given a preliminary green light to the appointment. It comes just days after Fabrizio Viola quit the top job. (SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING: "Whoever takes over at the top of any Italian bank at the moment, has a massive job on their hands. Realistically they've got to work very closely with the Italian government and the European authorities in terms of raising new capital, not breaching any European laws and trying to keep shareholders happy at the same time." The Tuscan bank - founded in 1472 - is the world's oldest. But stress tests carried out in July suggest it's also one of the weakest. It needs to raise 5 billion euros of capital before the end of the year as part of an emergency rescue package. No easy task given the current state of Italy's banking sector. (SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING: "The Italian banks should have taken action to address their balance sheets and non performing loans at the same sort of time the UK banks did in 2010 - 2012. They've let the retrospective action slide shall we say and now they're having to try and raise fresh capital in a very difficult climate." With 360 billion euros of bad loans investors fear Italy's banking sector could destablise the euro zone's. Something Prime Minister Matteo Renzi will want to avoid as he prepares for a crucial referendum which could cost him his job.