The ratings agency Moody’s has taken it into its head to reduce the rating of 30 Spanish banks and savings banks. Three have been reduced to Ba1, which is junk bond status. One is the Banco Pastor. Since Moody’s announcement its share price has risen by 1.5%. Well, that isn’t surprising. The markets are increasingly less inclined to pay blind obedience to the opinions of Moody’s and the others. Moody’s says that there is an increasing probability that the State will bail out certain savings banks, so it reduces the rating of CatalunyaCaixa and Novacaixagalicia, which have been told that they will receive such aid. Moody’s also ignores the FROB fund set up to general applause by the Spanish government with the specific intention of guaranteeing banks. It also ignores the fact that some banks have merged and can thus help each other. Moody’s gives separate ratings to three savings banks that are now one bank called Bankia. The other day Spain sold 3-month bonds with a yield of below 1%. On 10 March Moody’s lowered Spain’s rating. Since then the Spanish risk premium has fallen from 226 to 192 points.
So it’s obviously time to bring this out again, by Forges, El País 2 May 2010.
Source El País
See also Not in the Moody’s
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