Monte Paschi says ECB rejected request for more time to raise capital

MILAN (Reuters) - Troubled Italian lender Monte dei Paschi di Siena said it had received an official communication from the European Central Bank on Tuesday rejecting its request for more time to raise capital.

The ECB said a delay could cause a further deterioration in the bank's liquidity position and capital ratios, Monte dei Paschi said.

This could, in turn, pose risks for the survival of the bank, the ECB said in its draft decision, according to Monte dei Paschi, Italy's third-largest bank.

"In addition, the ECB thinks that delaying the capital raising to January would not guarantee a more benign market situation," Monte dei Paschi said in a statement.

A source told Reuters on Friday that the ECB had rejected a request from Monte dei Paschi for a three-week extension until Jan. 20 to allow it to try to wrap up a privately funded 5 billion euro rescue plan.

(Reporting by Francesca Landini; Editing by Kevin Liffey)