Moody's hit hard at 15 big banks as the Euro-zone risk fears grow

Friday, 22 June 2012
As the global financial market has been struggling in the past months as a result of the financial crisis and the Euro crisis, the banks will likely be dragging it down once again. A leading credit rating agency, Moody’s has decided to down grade 15 of the world's largest financial institutions as their sustainability during this time is questioned.

Explaining the decision for the downgrade, Moody's global banking managing director Greg Bauer highlighted the banks' exposure to volatility in the world's financial markets.

Moody's credit rating - these ratings provided by Moody's downgrad of 15 major banks. Previous score in brackets:

Bank of America Baa2 (Baa1)

Barclay A3 (A1)

BNP Paribas A2 (Aa3)

Citigroup Baa2 (A3)

Credit Agricole SA A2 (Aa3).

Credit Suisse A1 (Aa1).

Deutsche Bank A2 (Aa3).

Goldman Sach A3 (A1).

HSBC Holdings Aa3 (Aa2).

JP Morgan Chase A2 (Aa3).

Morgan Stanley Baa1 (A2).

Royal Bank of Canada Aa3 (Aa1).

Royal Bank of Scotland Baa1 (A3).

Societe Generale A2 (A1).

UBS A2 (Aa3).

He said that all of the banks affected by the downgrades had "significant exposure to the volatility and risk of outsized losses".

These 15 banks had their ratings lowered: Bank of America, Barclays, Citigroup, Credit Suisse, Goldman Sachs, HSBC, JP Morgan Chase, Morgan Stanley, Royal Bank of Scotland, BNP Paribas, Credit Agricole, Deutsche Bank, Royal Bank of Canada, Societe Generale and UBS.

Moody's review of banks' credit ratings have been going on since February, and it says in its analysis that all the 15 big banks are obviously exposed to significant risks in the market, as a result of the European debt crisis among others.

Poorer credit ratings often make it more expensive for banks to borrow money. The fear now is that the high cost for capital could transferred to customers in the way of higher mortgage and fees.

Over 100 banks are part of Moody's review of the banking sector. Previously, several other European banks were downgraded by Moody's, among them Swedish Nordea and Handelsbanken.
By Scancomark.se Team

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