Eurozone epidemic meltdown: Spain in emergency crisis, Danish banks downgraded

Thursday, May 31, 2012
By Paul Martin

TheExtinctionProtocol.com
May 31, 2012

DENMARK – Moody’s has downgraded the credit rating of nine Danish banks, citing the impact of the rolling eurozone crisis on bank loan quality and on their fund-raising ability. The nine, along with the Finnish subsidiary of one of the banks, saw their ratings cut one to three notches, with one of them, DLR Kredit, pushed three steps down into the junk-bond realm at Ba1. “Danish financial institutions face sluggish domestic economic growth, weakening real estate prices and higher levels of unemployment, as well as the risk of external shocks from the ongoing euro area debt crisis,”’ Moody’s said. “Asset quality is deteriorating, and these pressures are expected to continue.” The rating agency also said that the “substantial” reliance of most of the institutions on funding from the market increases their vulnerability to the eurozone crisis. “Structural changes to that market have increased refinancing risk, posing a particular concern for mortgage credit institutions whose access to alternative funding is limited.” All but DLR Kredit remained in the low end of investment-grade rating. Moody’s said the average long-term ratings for Danish financial institutions stood at Baa1, “medium grade with moderate credit risk,” three steps above junk grade. But, Moody’s said, they remained in a weaker position compared to their Nordic peers to be able to manage credit risks. The nine were Danske Bank, Jyske Bank, Sydbank, Spar Nord Bank, Ringkjobing Landbobank, Nykredit, Realkredit, DLR Kredit, and Danmarks Skibskredit. Also downgraded was Danske Bank’s Finnish arm Sampo Bank. –Herald Sun

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