With the ink barely dry on its bailout plan, Italian bank Monte dei Paschi di Siena faces a Herculean task convincing investors to back a third recapitalisation in as many years and avert a banking crisis that would send shockwaves across Europe.
To stave off the risk of being wound down, the world's oldest bank has hastily unveiled the private sector-backed rescue blueprint late on Friday. It came just hours before the lender emerged as the worst performer in European stress tests that showed its capital would be entirely wiped out in a severe economic downturn.
The plan aims to clean up and bolster the bank's balance sheet once and for all, restoring to health a lender whose frailty threatens the wider Italian banking system, the savings of thousands of retail investors and the increasingly weak political standing of Prime Minister Matteo Renzi.
