Italian bank Monte dei Paschi di Siena sets out plans to get out of the ''emergency room'' and return to profit, clearing the way for a state bailout that should remove the biggest threat to the country's financial stability. Laura Frykberg reports.
It's been through a lot in its 545 year history and things could be looking up again for the world's oldest bank. Italy's Monte dei Paschi says a return to profit is now on the horizon... After the European Commission approved a restructuring plan.. including a 5.4 billion euro government bailout. (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "Question marks still remain about the legality and the wisdom of allowing the Italian state to bailout its banks, it will after all take a 70 percent stake in Monte Dei Paschi." Monte dei Paschi has been at the forefront of Italy's banking crisis. Burdened by bad loans and a mismanagement scandal. In the past week, Rome has begun to try and turn it, and other ailing banks around. Bailing them out, to the tune of more than 20 billion euros. Despite new EU rules which object to the practice. (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "Clearly there are voices within the euro zone, particularly in Germany, which are unhappy about state aid being used to bailout banks. What's interesting is the long shadow that the financial crisis continues to cast over the European banking system." Since then, only Greece, has seen such big state bailouts. Monte Dei Paschi has promised reform though.. Including cutting thousands of jobs, hundreds of branches... And selling more than 28 billion euros of bad loans with the help of a bank rescue fund.