December 16, 2011

Fitch downgrades six global banks

Wall Street road signFitch cut the "issuer default ratings" at the banks
Fitch has downgraded six of the world's largest banks, citing the challenging financial markets.
The banks include Bank of America and Goldman Sachs in the US, the UK's Barclays and France's BNP Paribas.
Germany's Deutsche Bank and Switzerland's Credit Suisse were also cut.
Fitch cut the "issuer default ratings" at the banks, which "reflect the ability of an entity to meet financial commitments on a timely basis".
Banks and credit markets have been squeezed by fear over the eurozone debt crisis, which has seen several nations in the 17-nation single currency bailed out and fears that the euro could collapse.
Banks that hold eurozone soverign debt have taken massive charges on the debt, and it has increased fears about banks lending to each other.
Last week, ratings agency Moody's downgraded France's three big banks due to their difficulty borrowing money.
'Increased challenges'
In a statement, Fitch said that these US and European banks "are particularly sensitive to the increased challenges the financial markets face".
The downgrades "reflected challenges faced by the sector as a whole, rather than negative developments in idiosyncratic fundamental creditworthiness," Fitch said.
Fitch also cut the so-called "viability ratings" at the six banks, which represent Fitch's view as to the "intrinsic creditworthiness of an issuer".
It also cut the viability ratings at Morgan Stanley of the US and French bank Societe Generale.
On 30 November, Standard & Poor's downgraded the long-term credit grades of a string of major financial firms, include Wall Street titans Bank of America and Goldman Sachs, Barclays, and HSBC.

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