Italy's Atlante II, the second rescue vehicle established to bail out troubled Italian banks, announced late on Monday that it has raised €1.7 billion ($1.9 billion) to invest in lenders' non-performing loans.

The financing takes Atlante II past the minimum threshold stipulated in its charter for the vehicle to become operational. Quaestio Capital Management, a private asset manager that oversees the Atlante fund, said that it expects to take the total capital of the fund to as much as €3.5 billion.

Atlante II has already committed to buying €1.6 billion of non-performing loans from the beleaguered Monte dei Paschi (BMDPF) , and will also seek to hoover up bad debts on the balance sheets of other banks.

"After the first closing, the fund will continue its fundraising activities, targeting both Italian and international companies" the investment manager said.

Monte dei Paschi stock has been under pressure throughout 2016 as bad loans have eaten into its capital buffer and the market fretted about whether it could withstand close scrutiny from regulators. On July 29, it imploded during the hypothetical adverse scenario featured in European Authority Stress Tests, with all of its equity and spare capital wiped out by losses.

Italian bank stocks rose broadly on Tuesday morning. Monte dei Paschi led the charge, with the shares rising by more than 3.5% to €0.2519. UniCredit (UNCFF) stock, another lender whose capital buffer has previously been called into question by analysts, also rose sharply, by 2.3% to €2.06.

Quaestio Capital did not give any indication of who it has raised the money from, although a number of Italian firms have publicly pledged to invest, including Mediobanca (MDIBF) and UniCredit.

The Italian Professional Pension Funds Association, ADEPP, also urged its members to invest in the second rescue fund during late July.

The president of ADEPP, Alberto Oliveti, then told a parliamentary commission at the beginning of August that 13 out of its 19 members had indicated that they would be willing to consider allocating capital to non-performing loans.

However, it hasn't been plain sailing for the second Atlante fund. Oliveti is also reported to have told Reuters that the association itself has concerns over the price at which Atlante had decided to buy non performing loans from Monte dei Paschi, at €0.33 for each  €1.00 of the loans' face value.

On Aug. 4, one of the country's largest pension managers, Enasarco, is reported by Italian media to have said that it will not be investing in the fund.

Analysts have also expressed skepticism over the viability of the Monte dei Paschi rescue plan as well as the ability of Atlante II to make a meaningful dent in the bad loan pile.

Analysts at Berenberg said that the Monte dei Paschi plan leaves "no room for error" and that the Italian banking sector as a whole will require anywhere between €30 billion and €100 billion of additional capital in order to address the non-performing loans problem.

Barclays analysts suggest that Atlante II may be able to buy anywhere between €13 billion and €19 billion of non- performing loans with its remaining resources, but this still leaves a large pile of unaddressed loans.

However, in an August Q&A with Politico, Bank of Italy governor Ignazio Visco said that the international media has overhyped the problem surrounding Italian banks. Unconcerned by bad loans on balance sheets, he heralded the performance of Italian banks during recent European Banking Authority stress tests, before turning to the Monte dei Paschi rescue plan.

"I am confident that it will be carefully and effectively implemented in the coming months, and execution risks will be minimized." he added.

Atlante II's predecessor fund, Atlante,  had €4.2 billion of capital at its disposal as of April.  It is charged with investing in troubled Italian financial services assets, including bad loans and failing banks. Atlante has an investment period of up to two years.  Fundraising for Atlante II will close in September.