Saturday, February 18, 2012Italy must rapidly implement, extend reforms: central bank
PARMA, Italy, Italy's central bank governor urged the government on Saturday to rapidly implement planned reforms and take further steps to support the euro zone's third-biggest economy, which he said would shrink by around 1.5 percent this year.
In a keynote speech in Parma, Bank of Italy chief Ignazio Visco said the country's banking system was solid but high costs and recession meant lenders' earnings prospects this year were "not favorable."
"Italian banks are sound, but they have been especially hard hit by the sovereign debt strains," he said.
Highlighting funding strains, he said that in 2011 banks' fundraising from customers and markets declined by 2.8 percent, while their reliance on borrowing from the European Central Bank increased.
European Central Bank funding to Italian banks stood at around 200 billion euros ($262.8 billion) in January, up from just over 40 billion last June.
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