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Italy still in talks with Brussels on Monte Paschi's problem loan reduction plan-CEO

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FLORENCE, Italy, Dec 2 (Reuters) - Italy is still in discussions with the European Commission on a plan to further rid Monte dei Paschi of problem loans, the CEO of the

state-owned bank said on Monday after a daily at the weekend

reported that negotiations had fallen through.

Sources have said the Treasury is seeking to win EU approval for a plan that would allow Monte dei Paschi to cut some 10 billion euros in impaired loans without suffering losses.

The plan would see a chunk of the bank's assets and liabilities transferred to state-owned bad loan manager AMCO.

"The reduction of non-performing loans is something the bank has been working on for years so all possible ways to cut them further are under study," CEO Marco Morelli said on the sidelines of an event in Florence.

"There is an ongoing discussion ... between the Treasury and the European Commission," he added. (Reporting by Silvia Ognibene, writing by Valentina Za, editing by Giulia Segreti)

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