Monte dei Paschi's Defensive Bid Reshapes EU Banking Debate

Banca Monte dei Paschi di Siena, the world's oldest bank and a symbol of Italy's troubled public finances, has launched a €34 billion defensive counter-offensive to resist a takeover bid from rival Intesa Sanpaolo, according to a commentary published by Project Syndicate this week.

The Siena-based lender, founded in 1472 and rescued by Italian taxpayers in 2017, responded to Intesa's €30.6 billion offer on August 20 by launching share-exchange offers for Banco BPM and Banca Generali totalling roughly €34 billion, while also distributing €4 billion to its own shareholders.

The episode, as described by Lucrezia Reichlin, a professor at London Business School writing for Project Syndicate, reveals a deeper structural problem: EU policymakers have focused on forcing governments to surrender influence over national banking systems, rather than building a genuine European financing channel.