French banks downgraded by Moody’s

14/09/11 11:13 CET

world news

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As financial markets factored in a 90 percent chance that Greece will default on its debt, one of the world’s big three credit ratings agencies, Moody’s, downgraded two French banks on Tuesday.

Credit Agricole and Societe Generale were seen by analysts as having a high exposure to Athens’ financial woes.

The downgrades deal a fresh blow to eurozone leaders who are struggling to restore confidence in their economies.

Bank of France Governor Christian Noyer brushed off the decision: “Why do I say it’s relatively good news? Firstly, because it’s a very limited downgrade.

“Moody’s says that the level of funds and the profitability of French banks allows them to absorb all the potential losses on sovereign risks,” added Noyer.

The ratings of Paris-based banking giant BNP Paribas were left on review.

Moody’s is confident that the bank has enough cash to cushion itself, even if several eurozone countries get into trouble.

More about: Banking, Economic crisis, Eurozone crisis recovery plans, France, Societe Generale

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