Related News
Moody's downgrades French banks
Source: Agencies |
September 15, 2011, Thursday
|
Print Edition
Print Edition
Rating agency Moody's yesterday downgraded French banks Societe Generale and Credit Agricole following a period of huge volatility in the markets as investors fretted about their exposure to Greek debt.
Such a move by Moody's had been widely expected after the agency put them and rival BNP Paribas on review.
While cutting its rating on Societe Generale's debt and deposit rating by one notch to Aa3 and Credit Agricole's by the same amount to Aa1, Moody's warned that both could be downgraded further as it assesses "the implications of the persistent fragility in the bank financing markets, given the banks' continued reliance on wholesale funding."
Because of fears of the scale of European banks' exposure to Greek and other risky debt, some have been having trouble securing the loans they need to fund their day-to-day operations. US money-market funds have been particularly reluctant, and one European bank was forced to pay higher-than-market rates recently to get dollar funding from the European Central Bank.
But the banks, Societe Generale and BNP Paribas, in particular, have denied that funding difficulties have put them in any real danger, saying they have plenty of access to loans.
Though it maintained its Aa2 rating on BNP Paribas because its profits and capital base "provide an adequate cushion to support its Greek, Portuguese and Irish exposure," Moody's said it could be downgraded later.
Societe Generale said Moody's analysis shows the bank's exposure to Greece is "modest and manageable."
Societe Generale chief executive Frederic Oudea said the bank was prepared for a downgrade and will not change its outlook.
Such a move by Moody's had been widely expected after the agency put them and rival BNP Paribas on review.
While cutting its rating on Societe Generale's debt and deposit rating by one notch to Aa3 and Credit Agricole's by the same amount to Aa1, Moody's warned that both could be downgraded further as it assesses "the implications of the persistent fragility in the bank financing markets, given the banks' continued reliance on wholesale funding."
Because of fears of the scale of European banks' exposure to Greek and other risky debt, some have been having trouble securing the loans they need to fund their day-to-day operations. US money-market funds have been particularly reluctant, and one European bank was forced to pay higher-than-market rates recently to get dollar funding from the European Central Bank.
But the banks, Societe Generale and BNP Paribas, in particular, have denied that funding difficulties have put them in any real danger, saying they have plenty of access to loans.
Though it maintained its Aa2 rating on BNP Paribas because its profits and capital base "provide an adequate cushion to support its Greek, Portuguese and Irish exposure," Moody's said it could be downgraded later.
Societe Generale said Moody's analysis shows the bank's exposure to Greece is "modest and manageable."
Societe Generale chief executive Frederic Oudea said the bank was prepared for a downgrade and will not change its outlook.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
