The day after Italy's market watchdog banned short-selling on the stock after it fell more than 30 percent in two trading sessions, Treasury Undersecretary Pier Paolo Baretta said in an emailed statement:

"No intervention is expected in the coming hours. We are monitoring the situation as agreed with the European Union."

Monte Paschi, the world's oldest bank, is among the sickest on a roster of weak banks whose pile of bad debts and capital shortfalls are sending shockwaves across Europe.

(Reporting by Massimiliano di Giorigo, writing by Isla Binnie)