April 17 – please read this article with yesterdays forecast of a Europe sinking
Under pressure from banks, Moody’s Investors Service said Friday that it is delaying until early May its highly anticipated decision on whether to downgrade the credit ratings of 114 banks in 16 European countries.
Moody’s announced the review in February, saying it was needed in light of the banks’ weak conditions and the tough environment in which they’re operating.
It had planned to start unveiling the decisions this week.
Moody’s said in a statement it is “taking an appropriately deliberate approach during this review process and will conclude when it is confident that all relevant information has been received and processed.”
While Moody’s hasn’t said whether and to what degree it will cut various banks’ ratings, officials at multiple top European banks said they expect their grades to be knocked down at least one notch.
The looming downgrades have ignited a scramble among some lenders and investors who fear the development could fan the smoldering crisis.
In recent weeks, as Moody’s has neared its decisions, big banks have been lobbying the ratings agency not to slap them with multi-notch downgrades, according to people familiar with the matter.
“It’s going to add to the funding pressure on these banks,” said Simon Adamson, a banking analyst with research firm CreditSights Ltd.
Many bankers and outside experts hoped the sector–battered by losses on bad loans and investments in risky European government bonds—had turned the corner when the European Central Bank recently dished out roughly €1 trillion of inexpensive, three-year loans to at least 800 banks. Those loans largely eliminated the risk that a bank would abruptly collapse due to liquidity problems.
But the benefits provided by those loans has started to fade. Across Europe, bank shares have been pounded by renewed concerns about Europe’s financial health—a rout that continued Friday with a steep selloff in Spanish and Italian banks