Italy’s specialist pension funds asked to join in bank bailout

Specialist Italian pension funds will consider a government request to pour money into a bank bailout fund, days before European stress tests are expected to show the country’s third-largest lender is in need of urgent capital.

The Italian government is looking for ways to support struggling lenders without breaking EU state aid rules that require investors to take a hit first to shield taxpayers.

Monte dei Paschi, Italy’s third-biggest bank by assets, is likely to be found short of capital under an adverse scenario when EU stress tests results are announced on Friday.