New York, May 15 (IANS): Moody's Investors Service cut the long-time credit ratings of 26 Italian banks Monday, underlining the banking woes in both the country and the euro zone.

The move was a part of a wider review of European bank ratings, according to the agency, and came at a critical moment when the single currency union was struggling to maintain its integrity, reported Xinhua.

The main drivers of Monday's action include increasingly adverse operating conditions in Italy, mounting asset-quality challenges and weakened operating performance as well as restricted access to market funding which, if persistent, will put added pressure on banks to reduce assets, posing risks to their franchises and earnings, the agency said.

Furthermore, recent events highlighted the risks for creditors from potential weaknesses in governance, controls and risk management, especially at some smaller, privately-held banks, according to Moody's.

After the downgrades, the ratings for Italian banks now are among the lowest within advanced European countries, reflecting these banks' susceptibility to the adverse domestic and European operating environment.