Saturday 10 September 2011

French Banks Braced For Credit-Rating Downgrade -Sources

By Lionel Laurent

PARIS, Sept 10 (Reuters) - France's top banks are bracing themselves for a likely credit rating downgrade from Moody's, sources close to the situation said on Saturday, further complicating their efforts to assure investors they are riding out the tensions in funding markets.

Several sources said on Saturday that BNP Paribas , Societe Generale and Credit Agricole were expecting an "imminent" decision from the ratings agency, which first put them under review for possible downgrade on June 15.

Moody's at the time had cited French banks' exposure to Greece's debt-stricken economy as the reason behind the review, which was due to last three months. Outside commentators said the ratings were ripe for a downgrade because of rising borrowing costs in the face of sovereign debt turmoil.

"The decision is imminent," one Paris-based source said. "It will probably be a downgrade but it's not certain yet."

(Read on...)

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