UniCredit in rights issue

The Italian banking giant UniCredit has tapped shareholders for €7.5bn (£6.2bn) with a cut-price rights issue to plug a gaping hole in its balance sheet.

The 43 per cent discount on the new shares underlines the funding issues faced by Europe's banks, who are scrambling to shore up capital buffers as the sovereign debt storm rages.

The European Banking Authority has ordered banks to raise €114.6bn to bolster their balance sheets by June.