 "Moody's downgrades Credit Agricole, SocGen ratings")
Moody’s Investors Service on Wednesday downgraded credit ratings onFrench banks Credit Agricole SA (CASA) and Societe Generale SA by one notch, and left BNP Paribas on review for downgrade, citing their exposure to the Greek economy.
Moody’s cut SocGen’s debt and deposit ratings by one notch to Aa3 from Aa2. The outlook on the long-term debt ratings was negative. Moody’s anticipated that the impact of its review on the Bank Financial Strength Rating (BFSR) would be limited to a one-notch downgrade.
[caption id=“attachment_83754” align=“alignleft” width=“380” caption=“Moody’s cut SocGen’s debt and deposit ratings by one notch to Aa3 from Aa2. Reuters”]
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However, a day earlier, Societe Generale’s chief executive Frederic Oudea told a german newspaper that the bank’s exposure to periphery euro zone bonds is low and its liquidity situation is comfortable.
Asked in an interview by financial daily Handelsblatt if losses could be expected after financial sector weakness in August, Oudea said he could not speak for all banks “but we have communicated clearly that we have no problem.”
Oudea said European governments needed more fiscal discipline and convergence and he expected some sort of transfer mechanism to be established to help smooth the bloc’s imbalances, although he said he was unsure whether euro sovereign bonds were the right solution.
For Credit Agricole, Moody’s downgraded its BFSR by one notch to C from C+, and cut its long-term debt and deposit ratings by one notch to Aa2 from Aa1.
Greek Prime Minister George Papandreou will hold a conference call on Wednesday with French President Nicolas Sarkozy and German Chancellor Angela Merkel, Papandreou’s office said on Tuesday .
The call comes amid renewed talk among euro zone policymakers about a Greek default, prompted by the country’s failure to meet the fiscal goals set out in its EU/IMF bailout.
But the lack of a coherent plan from euro zone’s leaders to draw a line under the debt crisis, with concerns over the impact of a Greek default on the region’s banking sector, has kept Bunds pinned near all time highs.
Reuters