Italy has moved to reform large cooperative banks forcing them to transform into joint-stock companies within 18 months.

The changes have pushed lenders to consider possible defensive mergers before they are forced to drop voting and ownership limits that have shielded them in the past from possible takeovers.

He said new EU rules tightening capital ratio requirements had prompted many banks to cut costs and seek new revenue sources and were also likely to encourage consolidation in the sector.

"More than a few banks, especially medium sized ones, are evaluating mergers and acquisitions, including in response to regulatory innovations," Visco said in his speech at the Bank of Italy's annual general assembly.

(Reporting by James Mackenzie and Valentina Za)

Stocks treated in this article : Intesa Sanpaolo SpA, UniCredit SpA