Posts Tagged ‘Credit Agricole’

French Banks Have Their Credit Ratings Cut Due To Greek Debt Crisis Exposure

September 15th, 2011 Comments off

In a move that is no longer a surprise, one of the leading credit rating agencies, Moody’s, did the downgrade routine. This time it was two leading French Banks; Societe Generale and Credit Agricole. The cause was their significant exposure to sovereign debt from crisis-ravaged and virtually insolvent Greece. Moody’s made clear that these two French banks may be due for future ratings downgrading.

The Eurozone politicians, especially in France and Germany, are in a panic over Greece and its insoluble debt crisis. They are currently doing what they have done repeatedly since the crisis erupted; reassuring the markets that the brilliant, highly competent politicians in Europe have the situation under control, and Greece will not default. At this point, no one with an iota of common sense believes them. Furthermore, the markets are increasingly aware of-and frightened by- the near certainty of a Greek debt default, perhaps followed by Portugal, Ireland, and in a worst case scenario, Spain and Italy. What this means is that the major banks in Europe, in particular France and Germany, are sitting on a mountain of worthless assets. This crisis is far from over, and the ratings agencies are far from done with the downgrading.