Wine and friends, so goes the Italian proverb, improve with age. Banking, if the recent experiences of the world's oldest surviving financial institution are anything to go by, does not.
TheMonte dei Paschi di Siena bank, or MPS, is not quite as old as the beautiful Tuscan hills that surround its headquarters in the historic city of Siena, but having first opened its vaults in 1472, about the time a young Leonardo da Vinci was perfecting his craft, it has become part of the landscape.
Over the centuries MPS cemented both its place in Siena, where it has helped bankroll the city's famous Palio bareback horse races and enhance its enviable collection of classic artworks, and across Italy, where in recent years it has expanded to become the country's third largest bank.
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But MPS's reputation as a pillar of Italian finance has been unsettled by a bailout and a subsequent mismanagement scandal that is casting a long shadow over the country's upcoming general elections.
With a crisis now undermining the position of even the planet's most enduring bank, the MPS experience could easily be taken as a chilling harbinger of yet worse to come from the recent economic turmoil that has swept through Europe and beyond.
While the scandal has sent ripples of anxiety through Berlin, Paris, London and other key regional markets, experts say the most pressing concern is the deep flaws it has exposed in Italy's banking system. Unless it triggers reform, they warn, MPS should be viewed as an omen.
Alarm bells first rang publicly over Monte dei Paschi early this year when shareholders and market analysts became aware of irregularities dating back several years, chiefly $985 million-worth of loss-making derivatives deals that were kept off already debt-laden balance sheets.
Repeating a pattern that has become sickeningly familiar since the global economic crisis began in 2008, the revelation saw MPS shares take a sharp nosedive, losing more than 20 percent of their value over three days. And so, to prevent a catastrophic run on assets that could spread to other banks, the Italian government inevitably stepped in, bailing the bank out to the tune of $5.3 billion.
Although MPS now appears to be back on its feet, the fallout from its problems is likely to be felt for months, if not years to come. Earlier this week, Italian prosecutors ordered the seizure of assets worth about $53 million as part of a fraud investigation reportedly involving other banks.
The scandal has predictably had consequences for Mario Monti, Italy's technocrat caretaker prime minister, with accusations of oversight failure raised against his administration. The fact that the size of the bailout is almost equal to money raised by an unpopular property tax introduced by Monti has also stirred resentment.
And with Italy's general election just weeks away, it could also hurt the popularity of current favorite Pierluigi Bersani, whose center-left Democratic Party has had longstanding associations with MPS.