The fallout from Europe’s debt crisis is touching the US banking sector with ratings agency Fitch warning of a serious risk of contagion.
Its said: “unless the Eurozone debt crisis is resolved… the outlook for US banks will darken,” and that the “The risks of a negative shock are rising.”
The warning was aimed at the entire sector, but appears to have hit shares in Goldman Sachs and Morgan Stanley hardest.
In its report Fitch says banks have increased their trading operations in Europe in the past several years, while reducing their traditional lending operations.
Its analysts do not expect a resolution to the euro crisis for at least a year and seem unlikely to adjust their outlook on the banking sector any time soon.