Bank of Italy warns against using stress tests to calculate bank capital needs

MILAN, Aug 4 (Reuters) - Italy’s central bank head Ignazio Visco warned on Thursday against automatically applying the outcome of the latest euro zone health checks for five major Italian banks to the country’s other lenders.

* “It is not possible, nor advisable, to use this year’s stress test results to draw mechanistic implications for banks’ future capital requirements,” Visco told Politico newspaper.

* “The exercise is addressed to individual significant banks, not to national banking systems,” Visco said.

* Banks from Italy, Ireland, Spain and Austria fared worst in the latest European Union stress test, which the region’s banking watchdog said on Friday showed there was still work to do in order to boost credit to the bloc’s economy.

* After Monte dei Paschi stress test results were published, shares in Italian banks were heavily sold on the market, with investors concerned that most domestic lenders would need to strengthen their capital base to tackle an overall 200 billion euros in non-performing loans weighing on their balance sheets (Reporting by Francesca Landini; editing by Agnieszka Flak)