The talks about a sale of the Italian state rescued Bank Monte dei Paschi (MPS) to the competitor UniCredit are, according to insiders, on the verge of failure.
Reason are unbridled disagreements between the government and UniCredit over a costly recapitalization of MPS, said two people familiar with the talks to the Reuters news agency.
Most recently there was talk of a capital injection of more than seven billion euros from the state so that Unicredit would take over at least parts of MPS.
There is also a dispute over the extent of job cuts and liability risks, said one of the initiates.
The other insider said both sides had come to the conclusion that an agreement based on the terms that had been in place since the talks began in July was not possible.
The Hypovereinsbank parent UniCredit did not want to comment on this.
The government did not initially receive any response.
Monte dei Paschi is considered to be the oldest bank in the world.
Italy had saved the Tuscan money house from collapse in 2017 with 5.4 billion euros.
The plan is to shut down the roughly 64 percent state stake in MPS by mid-2022.
The negotiations with Unicredit had recently entered a decisive phase.
It was already expected that a preliminary agreement would be reached by a meeting of the Unicredit management on the quarterly results on October 27th.