ECB denies Italian bank more time to find funding

The European Central Bank (ECB) has refused to allow Italy’s Monte dei Paschi di Siena more time to raise the cash it needs to avoid being wound down, media reports said Friday.

The world’s oldest bank had on Wednesday asked for two more weeks to find the funds, saying political instability created by Prime Minister Matteo Renzi’s resignation has left investors reluctant to commit funds.

The refusal will pile up pressure on the Italian government to bail out the ailing institution to avoid a financial crisis in the eurozone’s third-largest economy.

The Italian bank’s new CEO Marco Morelli, who took over the reigns in September, had a meeting at the finance ministry on Friday to take stock of the situation, according to a source close to the ministry who declined to confirm the reports of the ECB’s decision.

The savings of thousands of retail investors would be lost if the bank went belly up.

The country’s third-biggest bank is trying to pull off a five billion euro ($5.38 billion) equity injection and had requested an extension of a deadline to find the money from the end of December to mid January.

The bank has lost nearly 85 percent of its market capitalization since the start of the year. It also emerged as the worst performer from European Banking Authority stress tests in July.