MILAN/FRANKFURT (Reuters) - Italy’s economy minister has said the European Central Bank should have explained more clearly why it nearly doubled its estimate of the capital shortfall for the ailing bank Monte dei Paschi di Siena (BMPS.MI), which is being bailed out by the state. Italy’s central bank also explained the difference between the figure of €8.8 billion requested by the European Central Bank under the so-called “precautionary recapitalisation” mechanism and the €5 billion that Monte dei Paschi failed to raise on the market. The Bank of Italy said in its statement that Monte dei Paschi’s estimate of a 5 billion euros capital gap was based on the results of the stress test, conducted on end-2015 data, and included assumptions such as the sale of its whole portfolio of defaulting loans - a key part of its plan to raise money privately.
The Bank of Italy says in a statement that the country's treasury will have to put up around 6.6 billion euros to rescue Monte dei Paschi given the European Central Bank's estimate of Monte dei Paschi's capital shortfall.