Skip to comments.Bank Downgrade Forward Calendar
Posted on 04/05/2012 12:46:15 PM PDT by SatinDoll
A major potential negative catalyst for financials globally is rapidly approaching as 114 banks are on review-for-downgrade by Moody's across 16 countries. Why do we care so much about ratings given their historical credibility?...In Europe, the fun heats up in the next few weeks as first Italian banks (4/16), then Spanish banks (4/23) and then Austrian (4/30) face from 1 to 4 notch downgrades and the potential to lose their short-term (funding-/CP-related) Prime-1 top rating, implicitly raising funding costs (and liquidity concerns) even further.
(Excerpt) Read more at zerohedge.com ...
Since a bank makes money primarily from loans, a down-rating requiring a larger amount of money for collateral means less money a bank can loan, and thus takes a chunk out of a bank's profitability.
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