The ratings agency Moody’s has issued a warning that it may cut down the credit ratings of 17 financial institutions that the firm is now evaluating.
Moody’s has said that Morgan Stanley, UBS, and Credit Suisse may probably have their ratings cut down by up to three levels. Moody’s also said that the current credit ratings of the financial institutions are not a very good representation of how they are actually doing in the market.
Nine out of the 17 banks that Moody’s is looking over include Barclays, HSBC and RBS.
The ones that are most probably going to get a two level cut are Baclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC Holdings and Goldman Sachs.
The ones that may be downgraded by just one notch are Bank of America and Nomura.
According to Alexander Potter who is a banking specialist at Berenberg Bank, “This follows a similar review by S&P and credit spreads highlight the fact the market is already, in most cases, well ahead of the slow-moving ratings agencies. Their input is obviously unhelpful for headlines, but their real economic relevance is becoming increasingly marginal, we feel.”
Moody’s ratings agency also looks at the credit standing of different countries. This week, the ratings firm has told the UK government that the country’s rating may be downgraded in the future if they do not pull the effort in keeping the country’s economy afloat with the current eurozone crisis at hand.
Keep Up-To-Date
