Monte Paschi Siena (BMPS) could well be worth zero

Torino-based financial advisor Maurizio Giuliani kept Cyceon in touch with developments related to Italy’s banking crisis and the news have been quite bad. In a news release from FTSE Russell Giuliani forwarded, Cyceon learned that if Banca Monte Paschi Siena (BMPS) continues to be suspended” following its board meeting scheduled for February 9, 2017, FTSE Russellwill remove the company from the index at a zero price.”

Presently, the biggest concern of the financial markets is the comatose of the Italian banking system, explained Giuliani, especially after the apparent failure of the Atlas fund. Although Unicredit opted for a EUR 13 billion capital increase, the fundamentals remain weak. According to Maurizio Giuliani, this could mean that BMPS was just frozen with a view to helping Unicredit with its recapitalization.

In the end, such maneuvers put forward the deep weakness of the Italian banking system as difficulties accumulated for two other Italian banks as well, Veneto Banca and Popolare Vicenza, added Giuliani. While the tension keeps mounting between Greece and its international creditors, Italy might end up as a financial nuke for Europe.