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Italy wants swift end to bank problems

Brescia - Banca Monte dei Paschi di Siena and Carige are working on a solution to the problems laid bare by European Central Bank stress tests but the Italian banking system as a whole is sound, Prime Minister Matteo Renzi said on Monday.

Renzi had previously made no direct comment on the results of the stress tests announced a week ago in which Monte dei Paschi, Italy's third-largest bank, and Genoa-based savings bank Carige came out with a combined capital shortfall of almost $3.75bn.

"The results of the stress tests tells us that the overwhelming majority of the Italian banking system is in a position to deal with the challenges of the future," Renzi told a meeting of business leaders in the northern city of Brescia.

"Those banking entities which encountered difficulties are working swiftly on solutions which are within reach," he said.

Other government officials, including Economy Minister Pier Carlo Padoan, have made it clear they expect the deficit at Monte dei Paschi and Carige to be made up on the markets and they do not intend to pump in additional government money.

Monte dei Paschi and Carige were the only two Italian banks which needed to make up a shortfall.

Monte dei Paschi, which has appointed Citigroup and UBS to advise on strategic options, said on Sunday it was working on plans for a capital increase to make up its €2.1bn capital deficit.

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