Moody’s says Italian banking system outlook negative
Global rating agency Moody’s says the outlook for Italy’s banking system remains negative. In a new Banking System Outlook published today global rating agency Moody’s said main drivers of the outlook are the rating agency’s expectations of continued challenging operating conditions for the banks; further rapid asset-quality deterioration; continued weak profitability and their restricted access to market funding that is unlikely to normalise over the outlook period. The rating agency noted that many of these negative rating drivers have intensified during the course of 2012, and that this trend is likely to persist. While the banks have strengthened their capital positions, capital levels remain vulnerable and below those of other large European banking systems. The combination of continued negative developments, some of which are beyond expectations previously reflected in Moody’s base scenario, and continued risks skewed to the downside, underpin the negative outlook and the pressures on the Italian banking system.