The ability of Italian households
and businesses to pay their debts is improving and having a
positive effect on banks' balance sheets, the Bank of Italy said
on a report on Friday.
It said household and business insolvency levels were almost
back to pre-crisis levels.
It also said that the incidence of deteriorated credit in
relation to the total amount of loans had dropped to 10.3%.
The Italian banking system is showing "signs of improvement"
but it "remains exposed to significant risks", the Bank of Italy
said.
The central bank said that "a weakening of the economic
recovery could worsen the quality of activities and
profitability".
It added that "high uncertainty in Italy and Europe" could
make access to the capital markets "more difficult and costly".
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