DOWNGRADES: Standard & Poor's has cut ratings on 15 Italian banks, but backed its current ratings on 15 of the country's biggest banks.

BANK WOES: The ratings agency said many Italian banks had cut reserves for loan losses even as problematic assets increased. The August cuts follow a big downgrade of 34 banks in February.

CONTEXT: The ratings agency warned that Italy's recession will be potentially deeper and more prolonged than previously thought. Investors are concerned that Italy will find it increasingly difficult to handle its government debt burden.