World’s oldest bank nears the end of its run

The world’s oldest bank turned a full 180 last month when it officially assumed the designation of Europe’s weakest financial institution.

This became apparent when the lender emerged as the worst-performing bank during the most recent stress test conducted by the European regulators. This particular ordeal follows many other similar ill-fated transactions, poor financial decisions, and even criminal activities.

The tests revealed that the bank is facing a recession that would eventually completely erode its operating capital. This made it expedient for the Italian government to the unpleasant fact that Monte dei Paschi’s five-and-a-half-century run is near its end. 

As part of a process facilitated by Rome, UniCredit, one of the country’s largest lenders, indicated in July that it was in talks to buy Monte dei Paschi. The lender however stated that it will only complete the acquisition on the condition that the government takes responsibility for all the bad debts.

Monte dei Paschi was founded in 1472 and will stay on as a brand name on bank branches in central Italy. However, the entity itself will cease to be independent and come under the management of UniCredit, from its headquarters in Milan. 

Sources speculate that the title of the oldest bank will most likely be passed on to Berenberg Bank, founded in Hamburg in 1590.