Greece has said it expects to get approval from eurozone finance ministers on Monday to begin a debt swap with the private holders of its government bonds. That is an essential step in securing a 130 billion euro EU/International Monetary Fund bail-out and avoiding bankruptcy.
But the financial markets remain sceptical as the timetable has slipped repeatedly.
Financial analyst Vangelis Agapitos said even then worries continue on how the Greek government can follow through on its promises: “I think an uncontrolled bankruptcy will be up to Greece and the Greek government to avert. I think the story does not end with voting. The story ends with implementing. Europe is having difficulty to realise how the Greek state or the Greek government or the Greek political parties continue to play this game, even as the situation has got worse and worse.”
Because of the debt problems of Greece, and other eurozone countries, rating agency Moody’s is threatening to cut the credit ratings of scores of banks and securities firms. The majority of those are in Europe with Italy and Spain heading the list.
Moody’s said it may cut the credit ratings of 17 global and 114 European financial institutions reflecting the greater risk that various governments may not be able to pay back their debts which would leave those banks seriously out of pocket.
It is looking at cutting the long-term credit rating of UBS, Credit Suisse and Morgan Stanley by as much as three notches following the review. It said the guidance was indicative.
Among the banks that might be downgraded by two notches are Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC Holdings, and Goldman Sachs. Bank of America and Nomura were included in those that might be downgraded by one notch.
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