S&P Downgrades 34 of 37 Italian Banks After Reducing Nation’s Rating!
- Anybody who thinks there will be a happy resolution to the problems in Europe and America need to have his head examined ! Practically all major western banks are bankrupt! Do not place a major portion of your savings in such banks. Put it in physical gold !
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S&P Downgrades 34 Italian Banks After Reducing Nation’s Rating!
By Patrick Clark, http://www.bloomberg.com/
UniCredit SpA (UCG), Intesa Sanpaolo SpA and Banca Monte dei Paschi di Siena SpA (BMPS) were among 34 Italian financial firms downgraded by Standard & Poor’s, after the credit-ratings company reduced the nation’s grade last month.
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UniCredit, Italy’s biggest bank, and No. 2 Intesa had their long-term ratings lowered to BBB+ from A, S&P said yesterday in a statement. Monte dei Paschi, the No. 3 bank, was reduced to BBB from BBB+. All three have a negative outlook, S&P said.
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Italy’s credit rating was cut two levels to BBB+ from A on Jan. 13 as S&P said European leaders’ struggle to contain the region’s debt crisis would complicate the country’s efforts to finance borrowings. S&P yesterday revised its banking industry country risk assessment, known as Bicra, for Italy to group 4 from group 3, citing mounting risks.
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“Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt,” S&P said in a separate statement on the country’s financial industry. “We anticipate persistently weak profitability for Italian banks in the next few years.”
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European nations are grappling with a debt crisis now in its third year as they seek to restore budget order and shore up the region’s financial industry. Spreads on some Italian banks are trading as if they were rated at the cusp of investment grade.
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‘Less Hit’
“Banks in highly indebted countries have a greater potential vulnerability than in others,” Italian Prime Minister Mario Monti said yesterday in a CNBC interview. “By and large, Italian banks have been less hit by the financial crisis than the banks in many other European countries.”
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