Ratings agency Moody's has extended its review of Italy's Aa2 credit rating by a further 30 days as it assesses the country's financial position.
Moody's initially put Italy's local currency and government bond ratings on review for a potential downgrade on 17 June, prompted by concerns surrounding the country's growth outlook, the implementation of its fiscal reforms, and challenging funding conditions for European sovereigns.
The ratings agency said it would "strive to conclude the review within the next month", saying it was continuing to assess Italy in light of "the increasingly challenging economic and financial environment and fluid political developments in the euro area".
Italy's current Aa2 rating is two notches below Moody's highest rating, AAA. The rating is one notch below that given to Italy by fellow ratings agency Fitch, and two notches below S&P's A+ rating. S&P cut its own outlook for Italy from stable to negative in May.
Fears of an Italian downgrade at the end of Moody's 90-day review period had put pressure on Italian banking shares prior to central banks' liquidity injection last Thursday.
Yields on Italian five-year bonds reached a record high of 5.6% last week; yields on 10-years fell after the central bank announcement but remained elevated, at 5.43%, late on Friday.
Moody's also downgraded French banks Societe Generale and Credit Agricole last Wednesday, citing their exposure to eurozone sovereign debt, and kept BNP Paribas on review for downgrade.
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds
Variable operating expenses