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Italy Banks Waning Loan Quality Hurts Efforts on Capital

Italian banks are struggling to increase capital levels as fallout from the European debt crisis and the country’s third recession in a decade force them to boost provisions against rising bad loan levels.

Italian corporate and household bad debt totalled 109 billion euros ($138 billion) in April, an increase of 15 percent from a year earlier, according to Bank of Italy data. Impairments, excluding writedowns, rose to 58 billion euros from 50 billion euros.