Six big banks have credit ratings cut by Fitch

Friday, 16 December 2011 11:52

Six of the world's biggest banks have seen their credit rating cut by Fitch amid continuing difficult economic conditions around the globe.

It reduced the "issuer default ratings" at the institutions, which "reflect the ability of an entity to meet financial commitments on a timely basis".

Those affected included Bank of America and Goldman Sachs, as well as Britain's Barclays and France's BNP Paribas, which had their ratings cut to A and A plus respectively.

Others targeted by Fitch were Germany's Deutsche Bank and Switzerland's Credit Suisse.

The eurozone crisis has meant that banks with euro-based debt are paying much heavier charges on it, resulting in countries being afraid to lend to one another.

For example, Spain saw its borrowing costs reach a 14-year high last month as investors worried that the country would not be able to pay back what it had taken.

Fitch explained that the banks affected by the reductions "are particularly sensitive to the increased challenges the financial markets face".

The move was agreed between prime minister David Cameron and president of the European Council Herman von Rompuy.

Also slashed were the "viability ratings" at the six banks.

"Over time market conditions are likely to ease, but Fitch expects market volatility to remain above historical averages and economic growth in developed markets to remain subdued for a prolonged period," a statement said.

The FTSE 100 Index had not been too badly affected today (December 16th 2011), with Barclays shares 0.6p higher at 171.1p and the index as a whole 28.5 points stronger at 5429.2.

• Tags:
• banks
,
• barclays
,
• credit rating
,
• current accounts
,
• fitch
,
• news
,
• savings