FIRST AIRED: December 5, 2016

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Transcript

00:00:01
>> The world's oldest bank in trouble as Italy tips into political turmoil. Monte Dei Paschi Di Siena on the brink as investors consider whether to rescue the country's third largest lender in this new era of uncertainty.>> Italy's bank are weighed down by bad loans, people haven't been paying their money back
00:00:21
>> And to deal with that, they need to raise billions of euros of fresh capital. This is a bank which has been in trouble for a number of years now. And it had until the end of the year to raise around 5 billion euros. It was hoping this week that it was gonna raise about 3 billion euros on the markets.
00:00:37
But with this result, that makes that look a lot less certain>> Reuters' Rachael Armstrong says if the bank threatens to collapse, the government would likely step in to prevent a crisis. But that would still hit many Italians in the pocket.>> Now under new rules brought in to have the government bail out, you effectively have to force bondholders to take some losses.
00:00:57
And in Italy, those bondholders tend to be just ordinary people who've invested their savings in those banks. So you could see those people suffering severe losses.>> Shares in Italian financials tumbling as much as 4% Monday before clawing back the initial losses. Italy's biggest bank, UniCredit, is to unveil its own cash call next week for some 13 billion Euros.
00:01:21
Some analysts fear a ripple effect on other banks throughout Europe. However, European policy makers have dismissed talk of a renewed crisis.