Europe’s banks are at risk of being downgraded by ratings firm Moody’s, with as many as eighty-seven banks in fifteen euro zone countries put on review for a downgrade.
A statement by Moody’s cited “The review has been caused by the credit-rating firm’s view that within Europe, systemic support for subordinated debt may no longer be sufficiently predictable or reliable to be a sound basis for incorporating uplift into Moody’s ratings.”
Meanwhile, Moody’s warned France Monday that its top notch triple-A rating outlook is at risk after a rise in the country’s borrowing costs and weak growth. France’s bond yields have risen sharply recently and the country’s economic growth is waning. These factors are harming its ratings outlook and the euro zone’s second largest economy may soon lose its coveted AAA status.
France is also under watch by Standard and Poor’s, which reported in French La “Tribune” newspaper that it is planning to change its outlook on France’s triple-A credit rating to negative within the next 10 days.
French Finance Minister Francois Baroin said the focus should not be solely on France and that while the euro zone debt crisis was serious, France was “clear-sighted” on it.
“Everyone is concerned, not just France. It’s all the euro zone countries,” he told France Info radio, asked about the La Tribune report.