Decades before Christopher Columbus sailed off from Genoa for American shores, his fellow Italians in the Tuscan town of Siena were helping to lay the foundation of modern banking. Banca Monte dei Paschi di Siena SpA, the financial institution set up in 1472, is the world's oldest surviving bank. But a recent financial scandal has called its stability into question.
In January, Monte Paschi disclosed that the bank's former managers had used risky derivative swaps between Tokyo-based Nomura Holdings and Deutsche Bank AG to conceal losses incurred during the global financial crisis. As a result, the bank was forced to take a €730 million ($960 million) loss over the transactions.
