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Moody's downgrades 26 Italian banks

Leading ratings agency Moody's has downgraded the credit scores of 26 banks in Italy as the country's financial problems continue to show no sign of abating.

In a report published by the organisation this morning (15 May), it indicated that financiers are increasingly at risk from the effects of the government's debt-reduction measures and the nation's ongoing period of recession.

As such, Moody's has decided to cut the ratings attached to 26 banks across the country, including Intesa Sanpaolo and UniCredit - its two largest lenders by assets - from A2 to A3.

Other financiers saw their score be lowered by as much as four notches, while ten of the 26 were cut to "junk" status.

In a statement released along with the report, Moody's noted that its ratings for Italian lenders are now the "lowest within advanced European economies" to reflect their "susceptibility to the adverse operating environments" both at home and abroad.

By Claire Archer