MILAN Dec 28 Standard & Poor's said on
Wednesday it did not expect any immediate effect on Italy's
sovereign rating following the government's decision to set up a
20 billion euro ($21 billion) fund to help ailing banks,
including Monte dei Paschi.
The credit ratings agency currently has a 'BBB-' rating for
Italy, with a 'stable' outlook.
The agency said that if the 20 billions euros were fully
drawn, the country's net general government debt would increase
by 1.2 percent of gross domestic product to 131.6 percent of GDP
at the end of 2017.
"The borrowings to fund the recapitalisations would
crystallize some contingent liabilities on Italy's balance
sheet... this would reduce Italy's total contingent liabilities
because they would be transformed into government debt," it said
in a statement.
($1 = 0.9581 euros)
(Reporting by Giulia Segreti; editing by Agnieszka Flak)