ROME, (Reuters) – Italy’s Treasury has asked for a shift at Monte dei Paschi (MPS), which the Treasury owns 64%. This is as the bailed out lender looks to tap cash markets, according to three people familiar with the matter.

In a major setback to Rome’s reprivatisation plans, the Treasury failed to comply with UniCredit’s terms of acquisition.

Due to the collapse in talks with UniCredit, Treasury has sought an extension to an end-2021 deadline for MPS return into private hands.

Italy has begun discussions with European Union Competition Authorities about a revised restructuring plan for MPS. Sources have indicated to Reuters that the new deadline will not be before 2023.

MPS will need to raise funds by selling shares in the interim. MPS was deemed the most at-risk eurozone lender last summer during industry stress tests by European bank supervisors.

According to sources, Guido Bastianini was under increasing pressure from the Treasury after UniCredit failed negotiations.

According to sources, Bastianini knew of Treasury intentions earlier this month but refused to give in under pressure. MPS did not respond to a request for comment. MPS declined to comment on the request by Treasury.

MPS, Italy’s fourth-largest Bank, stated it intends to raise 2.5 billion Euros through an upcoming share sale.

Italy, which saved MPS in 2017, at a cost of taxpayers exceeding 5.4 billion euro, will inject more funds into the bank under the cash call. However, EU regulations on state aid to banks requires that MPS secure private investment.

MPS, a bank regulator deems too large for it to be shut down, has been at forefront of the banking crisis in Italy for several years.