IntesaSanpaolo SpA, UniCredit SpA, Unione di Banche Italiane SpA and other large andmedium-sized Italian banks face considerable risks if Italy's governmentcontinues to ask them to support the country's weaker lenders, according toFitch Ratings.

Large Italian financial institutions have, for instance,been asked to fund Italy's newbad bank. Fitch Ratings pointed out that while the vehicle willlikely underwrite part of BancaPopolare di Vicenza SpA's capital increase and thereby take some of the pressureoff UniCredit as the soleguarantor, this also means that the likes of Intesa Sanpaolo willindirectly finance an investment they normally would not get involved with.

If these demands on Italy's large banks continue, theirfinancial profiles will weaken and their ratings could come under additionalpressure, said Fitch, which recently revised the outlooks on and to negative from stable.