Standard & Poor’s has downgraded 15 Italian banks, saying Italy faces a potentially deeper and more prolonged recession than the ratings agency had originally anticipated.



Banks in the eurozone’s third largest economy are under pressure amid the widening eurozone debt crisis. They are seen as vulnerable because of their vast holdings in Italian government bonds.



Despite speculation, there was no question of the Italian or Spanish leaders openly embracing any EU bailout plan when they met this week. The economic data may be deteriorating but Italy’s Prime Minister Mario Monti has said Europe is starting to see the light at the end of the tunnel.



The European Central Bank indicated on Thursday that it may start buying government bonds again to reduce crippling borrowing costs for Spain and Italy. But ECB President Mario Draghi indicated that any intervention would not come before September.