Moody's Cuts Ratings for 30 Spanish Banks
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Moody's Investors Service cut senior debt and deposit ratings on 30 of Spain's smaller banks, as the agency reviews whether governments are going to be able to support all lenders in crisis.
"It seems increasingly plausible that hard choices will need to be made at some point over the rating horizon, balancing the sovereign’s incentive to support the banks with the need to protect its own balance sheet," Moody's said in the statement. "It is, in Moody's view, increasingly likely that the sovereign will not be prepared to write all banks a blank check."
The agency cut ratings of 15 lenders by two levels and five by three or four notches, while saying the outlook on senior and deposit ratings for most banks remains negative.
Moody's had to reconsider the state support it factors into ratings as governments are seeking to guarantee taxpayers will not have to step in to bailout banks.
Ratings of country's three biggest banks, BBVA, Santander, and La Caixa, were unaffected by today's action.
"It seems increasingly plausible that hard choices will need to be made at some point over the rating horizon, balancing the sovereign’s incentive to support the banks with the need to protect its own balance sheet," Moody's said in the statement. "It is, in Moody's view, increasingly likely that the sovereign will not be prepared to write all banks a blank check."
The agency cut ratings of 15 lenders by two levels and five by three or four notches, while saying the outlook on senior and deposit ratings for most banks remains negative.
Moody's had to reconsider the state support it factors into ratings as governments are seeking to guarantee taxpayers will not have to step in to bailout banks.
Ratings of country's three biggest banks, BBVA, Santander, and La Caixa, were unaffected by today's action.
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