In our view, economic prospects in Italy are likely to be weaker than we had previously anticipated and weak overall in the next couple of years. We believe this will likely continue to dampen Italian banks' asset quality and profitability, and, specifically, may lead to high credit losses in the Italian banking system over the next two years significantly exceeding our previous expectations. In our opinion, UniCredit's credit risk profile is weakened by the heightened economic risks we now see for banks operating in Italy. We are therefore lowering our long- and short-term counterparty credit ratings on UniCredit to 'BBB-/A-3' from 'BBB/A-2'. The stable outlook reflects that on the long-term ratings on Italy and our expectation that UniCredit should be
