The Italian government approved a decree on Friday to bail out Monte dei Paschi after the world's oldest bank failed to win investor backing for a desperately needed capital increase. Monte dei Paschi emerged as the weakest of some 51 European banks subjected to stress tests earlier this year by the ECB. It was given until the end of the year to sort out its problems or face being wound down. Since the 2007-09 financial crisis, the European Union has adopted rules that make state aid a last resort when it comes to helping troubled banks. "These (rules) are meant especially to protect taxpayers and put responsibility on investors. State funds are only intended as a last resort, and that is why the bar is set high," Weidmann, the hawkish president of Germany's Bundesbank, told Bild.
Euro is currently being traded around 1.0450 area. Pair is likely to be find support around 1.04 handle and resistance above 1.0480 level.
Source: Reuters.com
