Monte Paschi might not be an isolated bank case in Italy - Chairman

BAGNAIA, Italy Fri May 24, 2013 11:49am EDT

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BAGNAIA, Italy May 24 (Reuters) - The crisis that has hit Italy's third-largest lender Banca Monte dei Paschi di Siena might not be an isolated case, Monte Paschi Chairman Alessandro Profumo said on Friday.

"There could be other cases similar (to the one of Monte dei Paschi)," Profumo said at a conference in Bagnaia, close to Siena, where Monte Paschi is based.

"Some people at Monte Paschi, who desired to retain the power they had gained, decided to hide problems and bend the rules," he said, referring to the bank's former management.

Monte Paschi had to ask for state loans worth 4 billion euros to fill a capital gap stemming from its exposure to Italy government bonds as well as from risky derivatives trades.

Prosecutors are investigating whether the bank's former management misled regulators about a costly 2008 acquisition and the true nature of the derivatives trades. (Reporting By Paolo Biondi, writing by Francesca Landini, editing by Danilo Masoni)

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