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Board of troubled Italian bank MPS meets in last-ditch bid to find capital

The board of troubled Italian lender Monte dei Paschi di Siena is meeting as the bank searches for a way to repair a five billion-euro hole in its finances.

If MPS cannot raise additional capital from private investors in the coming days, it could need an Italian taxpayer-funded bailout.

The bank's troubles are one of the urgent tasks confronting the new Italian government to be headed by premier-designate Paolo Gentiloni - Italy's former foreign minister who was named on Sunday to lead the country.

A bailout could be politically explosive, because European Union rules could mean that bank bondholders must take losses as a condition of pouring in taxpayer money.

Many bondholders are small-time investors who may not have been fully aware of the risks. The government could look for a way to compensate them.

AP

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