Moody's reviews 114 financial institutions, nine in UK

16th Feb 2012 07:42

Moody's Investors Service has announced rating actions affecting no less than 114 financial institutions in 16 European countries as the sovereign debt crisis continues to take its toll. The credit ratings agency aptly points out that the "adverse and prolonged" impact of the euro area crisis makes the operating environment "very difficult" for European banks. It also notes that the recent downgrade of nine European sovereigns last Monday continues to put pressure on the institutions' credit-worthiness.Even though Moody's is positive on supportive actions being taken by many governments with regard not only to their banking systems but also via accommodative monetary policies, the agency insists that "these are overshadowed by the aforementioned pressures."The financial institutions affected by this announcement are headquartered in the following countries: Austria (eight), Belgium (one), Denmark (eight), Finland (one), France (10), Germany (seven), Italy (24), Luxembourg (one), Netherlands (six), Norway (one), Portugal (six), Slovenia (four), Spain (21), Sweden (five),Switzerland (two) and UK (nine).The announcement comes as part of a wider analysis of ratings for banks and securities firms with global capital markets operations which include the following 17 institutions: Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, Royal Bank of Canada, Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC, Royal Bank of Scotland, Société Générale, Crédit Suisse, Macquarie, Nomura and UBS. "Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions. These difficulties, together with inherent vulnerabilities such as confidence-sensitivity, interconnectedness, and opacity of risk, have diminished the longer term profitability and growth prospects of these firms," Moody's explained in the announcement. JM