Several European banks set to experience downgrades

31 May 2012

A wide range of European banks are set to experience credit rating downgrades in the coming weeks as leading agency Moody's reacts to the ongoing eurozone debt crisis, analysts believe.

Several financiers in embattled member states such as Spain and Greece have had their scores cut in the recent past but it is now widely thought lenders in key economies like Germany and France will also be downgraded, Dow Jones reports.

Thus far, Moody's has focused its efforts on banks based in periphery nations in the economic bloc, but the body has now switched its attention to financiers in core countries.

Michael Symonds, analyst at Daiwa Capital Markets, said such action is of "considerably more importance" than the reduction of rates attached to lenders on the fringes of the eurozone.

"Large downgrades may impede what access these banks still have to market funding and restrict their ability to conduct certain activities," he noted.

By Gary Cooper

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