UPDATE 1-Moody’s Italy apologises over banks statement

* Moody’s exec says Thursday statement “too synthetic”

* Moody’s exec says Italy banks not under great pressure

(Recasts, adds details, quotes)

By Valentina Za

MILAN, May 7 (BestGrowthStock) – The head of Moody’s (MCO.N: ) rating
agency for Italy apologised on Friday for a statement on banks
that said sovereign risk contagion could spread to banking
systems, including Italy’s.

The Thursday statement was only to announce release of
Moody’s reports on banking systems in Portugal, Spain, Italy,
Ireland and Britain, Alex Cataldo, director general for Moody’s
in Italy, said at a presentation on sovereign risk.

The statement had said sovereign risk contagion could spread
to banking systems in those countries and Italy’s faced major
risk if market pressure on sovereigns increased. [ID:nWLA3277]

Cataldo called the statement “too synthetic” and added: “The
report is very clear. The statement should be only to say we
have done a report.”

Banking shares fell sharply on Thursday after the Moody’s
report and after Italy hiked its debt outlook. [ID:nLDE6451WR]

Italy’s two biggest banks, Intesa Sanpaolo SpA (ISP.MI: ) and
UniCredit SpA (CRDI.MI: ), closed down more than 7 percent.

Cataldo said Italy’s banking system was not under great
pressure and had many strong points. [ID:nWEA0871]

Moody’s said during the presentation that Italy has had less
exposure to the sovereign debt crisis than other countries. It
also has an encouraging record in turning around its trend in
public debt, according to a slide. [ID:nWEA0849]

Relatively moderate effort is needed to keep Italy’s debt
under control but interest payments represent a possible source
of vulnerability.

Italy’s primary balance is a standout difference between it
and other European countries, according to a slide.

Alexander Kockerbeck, Moody’s analyst for Italy, said the
country had good credibility but faced the danger of a high risk
premium. [ID:nWEA0889]

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(Writing by Ian Simpson; Editing by David Holmes)

UPDATE 1-Moody’s Italy apologises over banks statement