Insolvency almost at pre-crisis levels (2)

(ANSA) - Rome, April 28 - 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".