ROME -- Private investment banks have postponed the recapitalisation of Italy’s oldest bank Monte dei Paschi di Siena, while the Italian Treasury stands ready to approve a state recapitalisation, financial sources said Tuesday.

 Following the announcement of the Italian referendum result, the stock-markets did not undergo the frenzy that was predicted, although Italian bank shares remain unstable. Monday, the Tuscan bank fell by another 4.21 percent and Tuesday it continues to fall.

 However, the plan to save and relaunch the bank by other private investment banks like Mediobanca and JP Morgan is undergoing a sort of 'suspension period,' Il Sole 24 ore writes, almost parallel to the country’s political situation.

 If the intervention operation by these banks fails then Il Sole reports that the Italian Treasury is ready for the State to intervene directly to save the bank.

 The infrastructure for this operation is already in place, born out of the latest technical discussion between Rome and Brussels, but the decision to use this infrastructure has not yet been made, as it very much depends on the settling of the country’s current political situation.

 Mediobanca, JP Morgan and the other banks in the guarantee consortium met in Milan, Monday, to discuss the recapitalisation decision, but it led to a slippage and to everything being frozen. It seems that international investors want to wait to gauge what will happen with the new government before intervening with capital.

 nkd