Moody's downgrades ratings of 5 Greek banks

10:51, April 01, 2010      

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Moody's credit rating agency downgraded on Wednesday the ratings of five Greek banks, insisting on a negative outlook and leaving open the prospect of further downgrades, just a few days after an EU-IMF deal for the support of Greek economy.

Moody's choice did not come as a surprise in Athens, as government officials and local analysts recognize that even after the Brussels EU summit agreement, international markets need more time and stronger, concrete messages to be convinced that Greece is on the right track of recovery from a severe economic crisis.

The rating agency after all cited in the statement released on Wednesday that the decision is based on fears that the country's weak macroeconomic outlook and the still negative climate for Greece in the international markets will eventually have an effect on the banks' capacity to generate earnings.

"In the past year pressures on the macroeconomic fundamentals have been evident and are expected to intensify until the end of this year," the Moody's statement said.

The five banks which received bad marks from Moody's are the National Bank of Greece which slipped category from A1 to A2, EFG Eurobank and Emporiki which were downgraded to A3/Prime-2 from A2/ Prime-1, Alpha Bank which is now rated at A3/Prime-2 from the previous A2/Prime-1 and Piraeus Bank which fell to Baa1/Prime-2 from A2/Prime-1.

Moody's estimates that the new package of austerity measures pledged by the socialist government in order to correct fiscal imbalances might have a positive impact in the long-term, but in the short-term the challenges Greece is called upon to face remain great and the agency cannot exclude the high probability of further pressures in growth.

Source: Xinhua


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