ECB's Praet says Italy banks undergoing "severe" adjustment

Reuters

Italy's banks are currently undergoing a period of tough adjustment due to their exposure to the sovereign debt crisis, European Central Bank policymaker Peter Praet said on Friday.

"The Italian banking sector is undergoing a very severe adjustment," Praet said, speaking on the sidelines of a conference.

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Praet said the Italian government had been late in addressing the sovereign debt issue but had recognized the need to reform its public finances.

"It is key that the public finances in Italy are put on the right track. This has been recognized and addressed by the present government," he said.

(Reporting By Francesca Landini)