In June, the Italian Parliament approved Italy’s struggling
third-largest lender, Banca Monte dei Paschi di Siena (MPS), for
another round of state aid.  This week, Reuters reports the
Italian state may have to take a stake in the bank after it
posted larger than expected first-half losses of €1.6 billion.
MPS’ ongoing difficulties stem from imprudent lending and
acquisitions during both the Europe-wide credit expansion and
the “consolidation frenzy” which swept the Italian banking
sector in the late 2000s, leaving it with low reserves
compounded during the downturn by the bank’s €25 billion
exposure to Italian government bonds – described as
“proportionally higher than that of its domestic peers”.  One
other interesting piece of information: founded in 1472, the
Sienese institution also happens to be the world’s oldest
surviving bank.  I say “surviving”, of course, because the city
of Florence had a history of much older banks, many of which
went bankrupt over a hundred years before MPS was even founded. 
Th