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One more knock: S&P downgrades 34 Italian banks
Published: 11 February, 2012, 02:12
Standard & Poor’s main office
TAGS: Crisis, Banking, Economy
Standard & Poor’s has downgraded the credit rating of 34 major Italian banks, including country’s largest, UniCredit. This comes after the rating agency downgraded Italy’s grade to BBB+ last month.
Explaining its negative view on the Italian banking system, S&P cited the banks’ reduced ability to roll over their wholesale debt and so expected weak profitability, Reuters says.
“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,” the rating agency said in a statement.
S&P has downgraded 34 out of 37 banks it rates in Italy. The country’s biggest bank, UniCredit, as well as the second-largest, Intesa Sanpaolo, had their long-term ratings lowered to BBB+ from A, while Monte dei Paschi, the No. 3 bank, was reduced to BBB from BBB+.
“We anticipate persistently weak profitability for Italian banks in the next few years, and a risk-adjusted return on core banking products that may not be sufficient for banks to meet their cost of capital. We believe this may be negative for the Italian banking industry's stability,” S&P added in its statement.
On January 13, S&P reduced Italy’s sovereign rating to BBB+ from A, part of a mass downgrade of nine eurozone nations.
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The problem isn’t with the downgrading but always has been about the upgrading creating a false picture in order to get more loans on lower interest’s rates establishing the so-called “credit culture.” And those who bought the trick of the City London and Wall Street trapped themselves and now suffer the most - suffocating their own people of course for their dumb and greedy political decisions playing with the bankers.
The Beak wrote in#8
Just cannot see how Goldman Sachs created BRICS as a economic and financial power house at the expense of Europe which include Britain, France et. al. and the US. Look at the amount of Quantative Easing recently announced by the UK. The are releasing 365 billion pounds in 3 months. If the multiplier effect is 10 that amounts to 3.65 Trillion pounds. The sffect of thst amountb of paper on the world is tremendous. BRICS meaning Brazil, Russia, India, China South Africa which may now include Turkey. Wish you explain.
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@Beak
Don’t respond to idiots. Goldman Sachs DID NOT created the BRICS, they were well there, but Goldman Sachs concerned primarily with profits quickly noticed it and coined them “BRIC.”
The point is Goldman Sachs & Co cannot control the BRICS, Iran, etc., and now they start to each other as sharks. Iceland, Greece, Hungary, Italy, Portugal, Spain… is just the beginning what we see, the real ugliness will come when the City of London and the Wall Street turn on France and Germany - and then finally on each and other. America IS controlled by the City of London financial centre with the realistic ´monitory system empire´ but a physical empire either British or American.
I don't know why Europe cares about what S&P says... Who is the S&P?? Nobody, they have no authority, and the people who actually have money are clearly not in Europe or US, because every single Western country has more debt than money. It's interesting how countries like China and Russia don't give a damn about what S&P has to say.