Once again the main news surrounded Monte dei Paschi. With the world’s oldest bank rapidly running out of time to raise the €5 billion in capital it desperately needs – it’s only managed €2 billion so far, with a key Qatari investors choosing not to invest a €1 billion chunk – it looks like MPS will be forced into a government bailout. Italy approved a €20 billion increase to its debt ceiling yesterday, freeing up money for its ailing banks, starting with Monte dei Paschi.
This news has begun to drag on the rest of the European banking sector, with the likes of Deutsche Bank, Barclays and Lloyds all dipping their toes into the red after the bell. This in turn capped the region’s indices, with the DAX and CAC falling 0.1% and 0.2% respectively.
Though this afternoon provides one final pre-Christmas wave of US data, this morning’s economic calendar is depressingly empty, meaning the European indices may well end up stuck in the same lifeless trading patterns that plagued the first half of the week.
