Banca Monte dei Paschi di Siena SpA said it suspended interest payments on three hybrid notes after European authorities demanded bondholders contribute to the restructuring of the bailed out Italian lender.
Italy’s highest bond yields since the birth of the euro are reverberating through the financial system of Europe’s biggest debt issuer, driving lenders to seek record amounts of central bank financing.
European banks, including Deutsche Bank AG and Standard Chartered Plc, have less equity relative to assets than their U.S. peers, and will have to shrink or boost capital as regulators demand reduced leverage.
Banca Monte dei Paschi di Siena SpA, the bailed-out bank embroiled in a fraud probe, may approve tougher cost-cutting measures to win European regulators’ support for state aid and attract new investors.
Banca Monte dei Paschi di Siena SpA, the bailed-out bank embroiled in a fraud probe, delayed approval of a restructuring needed to win regulator support for state aid as the authorities complete their review of the plan.