The world’s oldest bank struggles on

The world's oldest bank is set to live a while longer. Italy's Monte dei Paschi di Siena, founded in 1472, has agreed a rights issue of up to €3bn, larger than its market capitalisation, in the latest stage of its battle to avoid nationalisation.

The bank has been struggling to meet a capital shortfall resulting from the ill-timed takeover of local rival Antonveneta in 2008 and bad loans resulting from the Italian recession, which have led to almost €8bn in losses over the past two years.

The non-profit foundation that currently controls the bank is expected to sell its stake as part of the capital raising.

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What the commentators said

Fears about capital adequacy may take a brief break, but next year's Asset Quality Review by the European Central Bank could raise more doubts about the quality of its loan book.

On the plus side, the bank has managed to stay out of state control, something that looked unlikely not long ago, said Neil Unmack on Breakingviews. Long-standing investors will gain little comfort; they have been almost wiped out. But for others, it could be "a cheap option on a still-elusive Italian recovery".