ROME, Oct 31 (Reuters) - The recently intensified monitoring of the liquidity levels at Italian banks is not raising concerns, a senior Italian official close to the matter said on Wednesday.
European banking supervisors have stepped up checks on lenders’ liquidity after a sharp increase in the country’s government bond yields, a senior EU source told Reuters earlier this month.
“The reinforced monitoring is not throwing up reasons for worry, the situation is good,” the source said.
He added that if the current high levels of the Italy/Germany bond yield spread should continue for another year the impact on banks would be “very serious”.
The high spread levels, however, are unlikely to translate into more severe capital requirements for banks under next year’s Supervisory Review and Evaluation Process (SREP) by the European Central Bank, he added. (Reporting by Stefano Bernabei, writing by Giulia Segreti)