Home > Man-Made Disasters > Moody’s Downgrades Six European Countries, Debt Outlook of Three Others ‘Negative’, Numerous Banks Downgraded

Moody’s Downgrades Six European Countries, Debt Outlook of Three Others ‘Negative’, Numerous Banks Downgraded


CNN – “Moody’s cut the credit ratings of six European countries on Monday amid continued anxiety over the continent’s debt crisis and its sluggish economy.

Italy, Malta, Portugal, Slovakia, Slovenia and Spain were all downgraded, while three other countries — Austria, France and the United Kingdom — had the outlook on their current Aaa ratings changed to ‘negative.’

Ratings for Italy and Spain now sit at A2 and A1, respectively, while Portugal is rated Ba2, all with negative outlooks.

Moody’s said in a statement that the main drivers of the ratings changes included ‘the euro area’s prospects for institutional reform of its fiscal and economic framework’ and ‘the resources that will be made available to deal with the crisis.’ The agency also cited fragile market confidence and Europe’s ‘increasingly weak macroeconomic prospects.'” Read more.

Fitch cuts ratings on 4 Spanish banks, citing previous downgrade of country’s sovereign debt – “Fitch Ratings downgraded four banks in Spain Monday as a result of its downgrade of that nation’s credit rating. The downgrade of Spain’s debt last month will weaken the government’s ability to support its largest banks, Fitch said in a statement. That makes those banks’ debt more risky. At the same time, a weak real estate market and economy will also depress the values of assets held by the banks, Fitch said.” Read more.

S&P Downgrades 34 Italian Banks After Reducing Nation’s Rating – “UniCredit SpA, Intesa Sanpaolo SpA and Banca Monte dei Paschi di Siena SpA were among 34 Italian financial firms downgraded by Standard & Poor’s, after the credit-ratings company reduced the nation’s grade last month. UniCredit, Italy’s biggest bank, and No. 2 Intesa had their long-term ratings lowered to BBB+ from A, S&P said yesterday in a statement. Monte dei Paschi, the No. 3 bank, was reduced to BBB from BBB+. All three have a negative outlook, S&P said. Italy’s credit rating was cut two levels to BBB+ from A on Jan. 13 as S&P said European leaders’ struggle to contain the region’s debt crisis would complicate the country’s efforts to finance borrowings.” Read more.

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