Reuters: Regulatory News: Italy govt to offer Tremonti bonds for Monte Paschi-source

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Italy govt to offer Tremonti bonds for Monte Paschi-source Jun 26th 2012, 11:21 ROME, June 26 | Tue Jun 26, 2012 7:21am EDT ROME, June 26 (Reuters) - Italy's cabinet on Tuesday decided to revive the use of so-called Tremonti Bonds, underwritten by the Treasury, in a move that should help Monte dei Paschi di Siena fill a gap in regulatory capital requirements, a government source told Reuters. Tremonti Bonds, named after former Economy Minister Giulio Tremonti, are bonds issued by banks and bought by the government with the proceeds going to shore up the bank capital. They can be converted into equity at the lender request. The world's oldest bank has been in talks with the Treasury and the Bank of Italy for a capital fix that would make it the first Italian bank to resort to state aid since 2010, when the euro zone crisis deepened, according to sources close to the situation. Monte Paschi will hold a board meeting later on Tuesady.

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