Similar requests feed uncertainty because capital requirements keep changing and the criteria being used are not entirely clear, ABI Director General Giovanni Sabatini told Reuters in an interview on Friday.

"Faced with uncertain capital requirements that appear to never be enough, and given current market conditions and weak profitability, banks may decide to further cut lending," he said.

Sabatini's comments come after Monte dei Paschi di Siena said on Friday the ECB had asked Italy's third-largest bank to raise its core capital level to 14.3 percent.

That compares to a regulatory requirement of 7 percent under so-called Basel III banking rules, and a 12.8 percent Common Equity Tier 1 level Monte Paschi had at the end of September.

The ECB made its request to Monte dei Paschi and other Italian lenders as part of its new role as single supervisor, which it took on in November after completing a yearlong health check of the banking sector.

Sabatini said that in supervising euro zone banks the ECB appeared to pay more attention to risks linked to souring loans than to elements such as leverage or derivatives.

Such a focus penalizes Italian banks that have a traditional business model centered on lending to businesses, he said.

Il Sole 24 Ore daily reported on Friday the ECB decided to set specific capital requirements for individual banks which in the case of most Italian lenders will be much higher than those set by Basel III rules.

The ECB sent letters to the euro zone banks it directly supervises where it outlined concerns and potential consequences based on the results of the yearlong review in October, banking sources said, but not all have been told to raise their capital levels.

Monte dei Paschi said discussions with the regulator were ongoing and the request was preliminary and subject to changes.

(Reporting by Stefano Bernabei, writing by Valentina Za, editing by Silvia Aloisi)