Forex News – Moody’s warns European banks of downgrade

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Moody’s Investor Service announced today that several European financial institutions have been put under review for a possible downgrade as a result of the banks exposure to the euro-zone sovereign debt crisis.

Some of the banks under credit watch are big banks like Deutsche Bank, Royal Bank of Scotland, HSBC, Societe Generale, BNP Paribas, Barclays, ING, UniCredit, Santander, Credit Agricole and Commerzbank.

A total of 114 financial institutions are under review from 16 European countries.

Moody’s highlighted the adverse and prolonged impact of the euro-zone crisis on banks’ operating environments, the weakening credit-worthiness of the region’s sovereigns and longer-term challenges to institutions with significant capital markets activities as reasons for the action.

“While there are mitigating factors such as the currently supportive stance of many governments toward their banking systems and accommodative monetary policies, these are overshadowed by the aforementioned pressures,” Moody’s said.

The announcement by Moody’s put further pressure on an already burdened euro which slid to below the key $1.30 level in European trading hours this Thursday.