Daily News: May 9, 2012

Moody’s Bank Downgrades Risk Choking European Recovery


Bloomberg reported that Moody’s Investors Service will this month start cutting the credit ratings of more than 100 banks, a move that risks pushing up their funding costs and forcing them to curb lending in a threat to economic growth.

Bloomberg said the cuts, which would follow downgrades by Standard & Poor’s and Fitch Ratings last year, could erode profits, trigger margin calls and leave some firms unable to borrow from money- market funds that have strict rules on who they can lend to. Without access to funding from private sources, banks have had to sell assets and reduce lending.

To read the full text of the Bloomberg story, click here.