Monte dei Paschi di Siena’s claim to be the world’s oldest surviving bank dates to its origins in 1472 in the Tuscan city from which it derives its name. At the time, Siena was a republic and the institution was created to offer loans to “poor or miserable or needy persons”.

In the intervening 544 years, the prospects of the bank and the city of Siena became entwined. By 1624, a decision by the Medici Grand Duke to guarantee accounts held at MPS laid the foundations of the deposit protection schemes that are now used to provide confidence to savers in the banking system worldwide. The Grand Duke used the proceeds of pasture he held in the Maremma, in south-western Tuscany, to provide the guarantees.

For centuries, the bank had a reputation of being conservatively run, if generous to the local economy. The bank funded businesses, charities and supported the famous Palio di Siena horse race. Until recently, it was said that the population of Siena either already worked for the bank, aspired to do so, or were already drawing their pensions from it.

But its problems have mounted since the 2008 banking crisis, when it paid €9bn (£7.6bn) for Banca Antonveneta. The deal doubled its size and turned it into Italy’s third largest bank behind UniCredit and Intesa Sanpaolo. Its seller was Santander, which acquired the Italian bank during the three-way bid for Dutch bank ABN Amro, the roots of which lay in the taxpayer bailout of Royal Bank of Scotland.

Three years ago the problems escalated. The Sienese bank asked the government for €4bn amid a scandal over loss-making derivatives contracts and alleged fraud.

The Italian government already has a 4% stake even before the latest bailout is agreed, most likely in the next 48 hours. A poor score in the heath checks introduced since the banking crisis - it was the weakest out of 51 tested across the EU - has sparked the latest demand for €5bn of fresh funds.