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Fitch downgrades seven banking giants Fitch downgrades seven banking giants
(40 minutes later)
Fitch has downgraded its ratings of seven of the world's largest banks, citing challenging financial markets.Fitch has downgraded its ratings of seven of the world's largest banks, citing challenging financial markets.
Bank of America, Goldman Sachs, BNP Paribas, Barclays, Deutsche Bank and Credit Suisse were cut. In a separate announcement, Fitch also cut Citigroup.Bank of America, Goldman Sachs, BNP Paribas, Barclays, Deutsche Bank and Credit Suisse were cut. In a separate announcement, Fitch also cut Citigroup.
Fitch cut the "issuer default ratings" (IDR) at the banks, which "reflect the ability of an entity to meet financial commitments on a timely basis".Fitch cut the "issuer default ratings" (IDR) at the banks, which "reflect the ability of an entity to meet financial commitments on a timely basis".
Banks and credit markets have been hurt by fears over the eurozone debt crisis.Banks and credit markets have been hurt by fears over the eurozone debt crisis.
Several nations in the 17-nation single currency bloc have been bailed out amid fears that the euro could collapse.Several nations in the 17-nation single currency bloc have been bailed out amid fears that the euro could collapse.
Banks that hold eurozone sovereign debt have taken massive charges on the debt, and it has increased fears about banks lending to each other.Banks that hold eurozone sovereign debt have taken massive charges on the debt, and it has increased fears about banks lending to each other.
Last week, ratings agency Moody's downgraded France's three big banks due to their difficulty borrowing money.Last week, ratings agency Moody's downgraded France's three big banks due to their difficulty borrowing money.
'Increased challenges''Increased challenges'
Fitch said the US and European banks "are particularly sensitive to the increased challenges the financial markets face".Fitch said the US and European banks "are particularly sensitive to the increased challenges the financial markets face".
The downgrades "reflected challenges faced by the sector as a whole, rather than negative developments in idiosyncratic fundamental creditworthiness," Fitch said.The downgrades "reflected challenges faced by the sector as a whole, rather than negative developments in idiosyncratic fundamental creditworthiness," Fitch said.
In the case of Citigroup, the rating agency said that the bank no longer enjoyed quite the same high level of financial support from the US government as it used to.
The bank received $20bn in capital injections from Washington during the financial crisis, as well as a $45bn credit line and $300bn in guarantees, not to mention hundreds of billions more in emergency loans from the US Federal Reserve.
Fitch also cut the so-called "viability ratings" of Morgan Stanley and Societe Generale, which represent the agency's view as to the "intrinsic creditworthiness of an issuer".Fitch also cut the so-called "viability ratings" of Morgan Stanley and Societe Generale, which represent the agency's view as to the "intrinsic creditworthiness of an issuer".
UBS had both its long term IDR and viability ratings "affirmed".UBS had both its long term IDR and viability ratings "affirmed".
On 30 November, Standard & Poor's downgraded the long-term credit grades of a string of major financial firms, include Wall Street titans Bank of America and Goldman Sachs, Barclays, and HSBC. On 30 November, Standard & Poor's downgraded the long-term credit grades of a string of major financial firms, including Bank of America and Goldman Sachs, Barclays, and HSBC.