Italy has approved a state bailout for Monte dei Paschi di Siena, its third largest bank.
The bailout gives authorisation to draw from a €20bn fund, although the size of the package has not been specified, the Financial Times reports.
The bank has been suffering from non-performing loans, but failed to secure €5bn from private investors to provide it with a capital injection to keep it afloat.
It instead raised €2.5bn from retail and institutional investors.
Junior bonds for the bank will be converted into stock under new European Union rules that do not protect bondholders in a bank bailout. It will then be converted into senior debt.