ECB warns Italy its 2026 budget could hurt bank liquidity

ROME, ‌Dec 15 (Reuters) - Measures ‍envisaged ‌in Italy's 2026 budget could ⁠have "negative ‌implications" on banks' liquidity as they might prompt ⁠lenders to cut interest ​paid on deposits to ‌lower taxes, ⁠and hence reduce liquidity buffers, the European Central ​Bank (ECB) said on Monday.

Measures in the budget affecting the financial ​sector, ‍which also ​include curbs on the way banks use interest expenses to lower their tax bills, ⁠are worth more than 11 billion ​euros ($12.93 billion) through 2028, according to Treasury estimates.

($1 = 0.8508 ‌euros)

(Reporting by Giuseppe Fonte, editing by Gavin Jones)