* Monte dei Paschi says trades were not submitted to board
* Board to examine findings of review by mid-Feb
* Monte Paschi says 500 mln euro aid request should absorb capital hit
* Shares down 8.3 percent (Updates with bank's statement)
By Silvia Aloisi and Stephen Jewkes
MILAN, Jan 23 (Reuters) - Banca Monte dei Paschi di Siena , Italy's N.3 bank, said on Wednesday it was reviewing three loss-making structured trades made in 2006-09 after its shares plunged for the second day in a row on fears of a mounting shortfall in its accounts.
Seeking to reassure investors, the Tuscan bank said the 500 million euros it requested in extra state aid in November would be enough to absorb a hit on its capital from those trades, which were linked to its vast Italian government bond portfolio.
The deals under scrutiny are the so-called "Alexandria" trade with Japanese bank Nomura, the "Santorini" trade with Deutsche Bank and a previously undisclosed derivative, called "Nota Italia", with an unspecified bank.
The findings of the review are expected to be submitted to the board by mid-February.
Shares in Monte dei Paschi, the world's oldest bank, fell 8.4 percent to 0.2541 euros on Wednesday before the statement was released.
They had already dropped 5.7 percent on Tuesday after reports the bank would have to book a loss of at least 220 million euros ($292 million) on the Alexandria deal alone.
The scandal over the trades, which has thrust the bank into Italy's election campaign, is the latest setback for Monte dei Paschi and analysts have called for the lender to quickly come clean and get its house in order.
The lender requested 3.9 billion euros in state aid last year to plug a capital hole stemming from its government bond portfolio and hedging bets gone wrong.
In the statement, the bank said the Alexandria and Santorini transactions were investments in long-term Italian BTP bonds funded through repo operations. The deals involved asset swap trades meant to protect the bank from fluctuations in interest rates.
It said the initial investment on Alexandria was reimbursed in December 2012 and the Santorini one was liquidated in 2009.
The Nota Italia trade, dating back to 2006 and also linked to Italy's sovereign debt, was restructured recently.
Monte dei Paschi said none of the operations, which were carried out under the bank's previous management, had been submitted to its board for approval.
Former Monte dei Paschi Chairman Giuseppe Mussari stepped down as head of Italy's banking association late on Tuesday, although he has denied any wrongdoing.
The bank's Chief Executive Fabrizio Viola, who was appointed last year alongside Chairman Alessandro Profumo to turn the bank round, said there had been no proper accounting of the deals.
He told Sky Italia television he believed Italian regulators had not received sufficient information about the trades at the time they were negotiated.
"Market flucutations led to a negative performance (of those deals) which came on top of a negative starting position," Viola said.
The Bank of Italy, which oversees domestic lenders, said in a statement the management of Monte dei Paschi was working with regulators to clarify the circumstances surrounding the deals. It said the true nature of those trades had not been previously revealed to authorities.
"It is essential for the bank's management to clarify, in an exhaustive and timely manner, the exposure to derivatives and potential losses that can arise from those positions," said Luca Comi, banking analyst at ICBPI Equity Research.
"If losses above 500 million euros emerged, the group would struggle even more to fix its capital position." ($1=0.7526 euros) (Reporting by Silvia Aloisi and Stephen Jewkes; Editing by Greg Mahlich)