Monte Paschi fails stress test, rating slashed to junk
October 19, 2012, 4:28 pm TWN
MILAN -- Moody's cut the rating of Italy's third-largest lender, Banca Monte dei Paschi di Siena, to junk and said it may need more state aid, triggering a 6-percent selloff in the bank's shares on Thursday.
Monte Paschi, the world's oldest surviving bank, was the only Italian lender to fail the European Banking Authority's stress tests and is the first of the five systemically important Italian banks to fall below investment grade.
Moody's said the bank's outlook remained negative, keeping pressure on the Tuscan lender as it tries to navigate a deep recession and the eurozone debt crisis.