Standard & Poor's said Wednesday that it had downgraded seven Italian banks because of sovereign debt risk, just a day after the agency downgraded Italy's credit rating.
The cut targeted leading banks Mediobanca SpA and Intesa Sanpaolo SpA, as well as Findomestic Banca SpA, Banca IMI SpA, Banca Nazionale del Lavoro SpA, Banca Infrastrutture Innovazione e Sviluppo SpA and Cassa di Risparmio in Bologna SpA.
The agency said it was assigning negative outlooks to the long-term ratings on these seven banks. It was also revising its outlooks from stable to negative on eight other Italian banks, including Unicredit.
This week, S&P downgraded Italian sovereign bonds to A from A-plus — reinforcing fears that Italy, with the second-highest debt burden in the eurozone after Greece, is getting drawn into Europe's debt crisis.
The agency cited weaker growth prospects and a fragile governing coalition as key reasons for its surprisingly swift downgrade, just four months after issuing a warning.
In a statement released Wednesday about the banks' downgrade, S&P said it was acting "in accordance with our criteria applicable to the relationship between the ratings on financial institutions and their related sovereign in the European Economic & Monetary Union."
It said it was "lowering our long-term ratings on seven Italian banks and assigning negative outlooks to the long-term ratings on these banks."
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