Italy lays groundwork for US$21b aid plan for ailing banks

Rome

THE Italian government moved closer to a potential rescue of lenders including Banca Monte dei Paschi di Siena SpA by seeking permission from Parliament to increase the nation's public debt by as much as 20 billion euros (S$30 billion).

The plan is aimed at providing a backstop to the banking system "through public guarantees in order to restore their short and medium-term lending ability", Finance Minister Pier Carlo Padoan said following a cabinet meeting on Monday night.