Moody’s reduces banks’ ratings

CREDIT rating agency Moody’s has downgraded two of the biggest French banks – Société Générale and Crédit Agricole.

It has cut both banks’ debt and deposit ratings by one notch and has also downgraded Crédit Agricole’s “bank financial strength rating” (BFSR) by a notch, a measure likely also be applied to SocGen, according to the agency.

The downgrading is due to the fact Moody’s thinks the banks are too exposed to the crisis in the Greek economy.

It is keeping a third bank, BNP Paribas, “under surveillance”, though it has not applied any changes to its ratings as yet.

The governor of the Banque de France, Christian Noyer, said this morning on RTL radio that the degrading was not cause for undue alarm and the situation was unlikely to get any worse for French banks. “They still have very good ratings and are at the same level as the other big European banks,” he said.

On the Paris stock exchange it is expected that the banks’ shares will see a bad day, after a rebound yesterday.

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