US ratings agency Moody's out with a note on Italy 17 Oct

  • Moody's have maintained its negative outlook with balance sheet fragility as banks face increasing pressure to reduce their large stock of problem loans
  • expects that a lower inflow of new problem loans in 2018 will reduce loan loss charges and support profitability

Say Moody's:

As of Dec 2016 Italian banks stock of problem loans stood at €349bln, the largest in Europe and accounting for 17.3% of their gross total of loans , more than 3x the EU average of 5.1% Italian banks' funding profile will remain sound as the funding comes mostly from deposits and wholesale financing needs are low.

Ongoing problems for Italy but some light at the end of the tunnel seen by Moody's/others.