Cleveland: Keeping Christmas at Home
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Well we can't say anyone didn't see this coming. But I still find it interesting, especially the timing.
Right on the heels of a fairly large corruption case that could...I repeat could, blow the lid off a lot of other fraudulent practices. And the Euro Zone on a ledge.
In the US, Bank of America, Citigroup, Goldman Sachs and JP Morgan are among those marked down.
BBC business editor Robert Peston reported on Tuesday that the downgrades were coming and said that banks were concerned as it may make it harder for them to borrow money commercially.
"All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities," Moody's global banking managing director Greg Bauer said in the agency's statement.
The other institutions that have been downgraded are Credit Suisse, UBS, BNP Paribas, Credit Agricole, Societe Generale, Deutsche Bank, Royal Bank of Canada and Morgan Stanley.
Moody's said it recognised, "the clear intent of governments around the world to reduce support for creditors", but added that they had not yet put the frameworks in place that would allow them to let banks fail. BBC
The last sentence is key to me. Do they mean to imply that these banks could and in fact should be allowed to fail ?
We know they are up to their eyeballs in derivative exposure. To the tune of billions of dollars or more.
Interesting comment from a ratings agency.