Media reports said Friday the European Central Bank (ECB) had turned down an Italian request for more time to complete a rescue plan for the troubled Monte dei Paschi di Siena (MPS) lender, the world's oldest bank.

MPS was due to complete a 5-billion-euro ($5.3-billion) recapitalization by the end of the year, but executives had asked for an extension until January 20, 2017, citing difficulties created by the nation's political crisis after the resignation of Prime Minister Matteo Renzi.

The bank's management indicated that the risk of early elections and the prospect of an anti-euro party coming to power were scaring away potential investors.

MSP clients' savings in danger?

The ECB's supervisory board had given a negative response to the request, the ANSA and Adnkronos news agencies said in separate reports.

MPS shares tumbled on the Milan Stock Exchange by over 10 percent on Friday on the back of the media reports and were temporarily suspended from trading.

If confirmed, the ECB refusal is likely to ratchet up pressure on the Italian government to prepare some form of state support to prevent MPS from going under.

However, a state intervention is politically toxic, because new EU bail-in rules stipulate that retail bond holders have to contribute to the cost. In MPS' case, this could mean hurting the savings of some 40,000 people.

Monte dei Paschi has been in business since 1472. It needs more money to cover losses from the cut-price sale of 28 billion euros' worth of bad loans.

hg/jd (AFP, Reuters, dpa)