Italy's president says Monte dei Paschi "serious issue"

TURIN Thu Jan 24, 2013 11:44am EST

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TURIN Jan 24 (Reuters) - Italy's president Giorgio Napolitano said on Thursday the situation at Italian bank Monte dei Paschi di Siena was a "serious issue", adding he was confident the Bank of Italy would handle the case.

"It seems to me that this is a quite serious issue which the Bank of Italy is handling," Napolitano told reporters in Turin.

"If the situation is serious, we should be worried, but I have full confidence in the Bank of Italy," the president said.

Banca Monte dei Paschi di Siena, Italy's third biggest bank, could face losses of as much as 720 million euros ($956 million) on past trades in financial derivatives which management says it only recently discovered.

The central bank said on Wednesday it was working with the management of Monte dei Paschi di Siena to clarify the nature of derivatives operations which were previously kept hidden. (Reporting by Gabriele Guccione, writing by Antonella Ciancio, editing by Danilo Masoni)

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