Currencies

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Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Financial

Hard-hit online lender CAN Capital makes executive changes

The biggest online lender to small businesses in the US has pulled down the shutters and put its top managers on a leave of absence, in the latest blow to an industry grappling with mounting fears over credit quality. Atlanta-based CAN Capital said on Tuesday that it had replaced a trio of senior executives, after […]

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Categorized | Banks

Monte dei Paschi shareholders approve €5bn recap plan


Posted on November 24, 2016

Shareholders at Italy’s Monte dei Paschi di Siena have voted in favour of the lender’s €5bn recapitalisation and a restructuring of its €28bn in gross non-performing loans, it said in statement on Thursday.

Monte Paschi, Italy’s third largest bank by assets, will launch a debt-for-equity swap from Monday, through which the bank hopes to raise up to €1.5bn, say senior bankers. It plans to raise the rest of the capital in a share sale.

Looming over the deal is an Italian referendum on constitutional reform on December 4 which senior bankers say will be decisive to plan’s success.

If a “No” vote wins – as polls indicate – senior bankers say Monte Paschi’s recapitalisation plan will not find backers and the Italian government will either end up taking a stake in the bank or the lender will have to undertake a mandatory debt for equity swap, in both cases forcing burden sharing on some investors.

Senior bankers say a “Yes” vote could see Qatar putting as much as €2bn into the bank as part of a relationship building exercise with the Italian government.

JP Morgan and Mediobanca are advising on the deal.

The shareholder meeting also voted Alessandro Falciai as chairman of Monte Paschi. He replaces Massimo Tononi who quit the role after only a year in the job following the ousting of former chief executive Fabrizio Viola under pressure from the Italian Treasury and JP Morgan.

Marco Morelli, a former Bank of America Merrill Lynch and JP Morgan banker, took over as CEO in September.