UPDATE 1-Italy's MPS bank says ECB sought detailed timeline of capital raising plan

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MILAN, June 30 (Reuters) - Italy’s Monte dei Paschi said the European Central Bank had asked for a detailed timeline of its 2.5 billion euro ($3 billion) capital raising plan, demanding the state-owned bank acts to fill any shortfall before it happens.

Monte dei Paschi last month said it expected a shortfall in its overall capital requirement of less than 1 billion euros as of March 31, 2022, down from an earlier forecast of 1.5 billion euros.

However, it stuck to its plan to raise 2.5 billion euros in capital pending the outcome of banking stress tests in July.

In a statement on Wednesday, Monte dei Paschi said it had sent the ECB a detailed plan of measures to boost its capital, indicating it would issue new shares by next March or April.

It reiterated, however, that finding a “structural solution” was still the priority, while any potential share issue would be subject to approval by European competition authorities.

The bank has repeatedly said a structural solution entails a merger with a stronger peer.

Italy owns 64% of Monte dei Paschi following a 2017 bailout and must cut its stake by mid-2022 under the terms of the rescue. Negotiations with UniCredit to offload the Tuscan bank, however, have so far failed to produce a deal. ($1 = 0.8440 euros) (Reporting by Valentina Za; Editing by Agnieszka Flak and Paul Simao)