"The problem is that raising the funds (for MPS) is proving to be a very difficult challenge -- much more so than was presented in the optimistic rescue plan," said Nicola Borri, an analyst at Luiss de Roma University.

For the moment that plan is going sideways. As Federico de Bortoli, the former director of `Il Corriere', put it, nothing of any substance has been signed apart from a pre-underwriting agreement, which amounts to "little more than a handshake." In other words, there's no commitment. And if there's no commitment, there's still no deal.


Deal or no deal, JP Morgan Chase and its Italian co-underwriter Mediobanca can be expected to walk away with their fees in tact. They're likely to add up to a fair amount of money: as much as €250 million in underwriting fees, plus an extra €300 million or so for setting up a €6-billion syndicated bridge loan.

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