MILAN Dec 23 Measures Italy's government
adopted in the early hours of Friday to support the banking
sector starting with a bailout of Monte dei Paschi di Siena
should reduce contagion risks for other lenders,
credit rating agency Moody's said.
"The proposal is credit positive for senior bondholders and
depositors of the banks involved as it increases their
protection through the additional capital," the agency said.
"It should also reduce the probability of contagion
spreading to stronger banks following the potential resolution
of a weak bank."
Italy on Friday approved a 20 billion euro ($20.9
billion)fund to support weak banks and Monte dei Paschi said it
would apply for a precautionary recapitalisation by the state
after failing to raise privately 5 billion euros.
($1 = 0.9579 euros)
(Reporting by Valentina Za)