Monte dei Paschi shares have been halted after it accepted a government bailout

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Shares and bonds in Monte dei Paschi di Siena have been completely suspended from trading on Friday morning after the Italian government confirmed a fresh rescue package for the country's sclerotic banking sector.

The rescue package, approved late on Thursday evening by Prime Minister Paolo Gentiloni and his cabinet, will initially focus on the Monte dei Paschi, the world's oldest bank. This comes after the Tuscan lender failed to seal a private sector rescue deal at the 11th hour.

As a result of the bailout announcement trading in all stocks and derivatives in MPS has been halted temporarily, while 10 of the banks bonds have also been stopped on Friday morning, a statement from the Italian Stock Exchange said.

On Thursday, as investors waited for confirmation of Monte dei Paschi's bailout, the bank's stock plumbed fresh lows, dropping as much as 9% in trade.

While Monte dei Paschi has seen its shares suspended, other lenders in the country have resumed this morning, and look to see the bailout news pretty favourably.

The FTSE Italia banking index, which looks at all listed lenders in Italy, is up by roughly 1.3% at 8.50 a.m. GMT (3.50 a.m. ET). Here's the chart (note the huge surge at the open):

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Mario Tama/Getty Images

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