Credit rating agency Moody's has downgraded France's three big banks due to their problems with borrowing money.
It cut the rating on long-term debt of Credit Agricole and BNP Paribas one notch from Aa2 to Aa3, and Societe Generale one notch, from Aa3 to A1.
Moody's said that "liquidity and funding conditions have deteriorated significantly" for each of the banks, Moody's said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It also put the banks on negative outlook, saying it would watch developments in European bank debt markets closely.
"The probability that the bank will face further funding pressures has risen in line with the worsening European debt crisis," the rating agency said of each.
The agency had already cut the ratings of Credit Agricole and Societe Generale in September.
Moody's acknowledged that all three banks were selling assets to reduce their reliance on outside funding, but said the sales might not raise as much as expected because so many other European banks were doing the same.
-
When is the “Bed & ISA” deadline? Cut-off dates for major investment platformsThe “Bed & ISA” deadline varies from provider to provider. We share a round-up of the key dates across major investment platforms
-
Spring Statement: what could Rachel Reeves say about pensions?The chancellor will deliver her Spring Statement on 26 March. We look at whether there will be any announcements on pensions that could affect savers or retirees
