Italy prepares to pump 15 billion euros into ailing banks

The world's oldest bank has until Dec. 31 to raise 5 billion euros ($5.2 billion) in equity or face being wound down by the European Central Bank, potentially triggering a wider banking and political crisis in Italy.

If needed, the government will pump 15 billion euros into the Siena-based lender and several other smaller banks to prevent that, two sources close to the matter said on Thursday.

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If Rome bails out the lender, European Union rules require that private investors share in its losses -- a politically dangerous condition for Italy's main ruling Democratic Party given early elections are looming next year.