FRANKFURT, May 15 (Reuters) - A failure to review Monte Paschi’s assets before the latest stress test is opening up “additional discussions” about whether private money raised by the Italian bank covers all its incurred losses, the European Central Bank’s top bank supervisor said on Monday.
The ECB set Monte Paschi’s capital shortfall at 8.8 billion euros ($9.65 billion) in December based on the European Banking Authority’s stress test, published last summer.
The bank must cover any incurred loss with private money while it is allowed to tap the public purse for potential losses that it would suffer under the adverse scenario of the EBA stress test.
“The EBA stress tests on which this (Monte Paschi’s capital shortfall) is based were not comprising an asset-quality review before the stress test,” Daniele Nouy told a conference in Frankfurt.
“So this is opening additional discussions to see whether incurred losses are really covered by private money.” ($1 = 0.9117 euros) (Reporting By Francesco Canepa)