Moody's downgrades biggest French banks

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.

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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.