Friday, 18 May 2012

Moody's Downgrades Spanish Banks

Spanish Banks – 16 are downgraded

The actions of credit ratings agencies, such as Moody’s can be overstated but are always reported. The timing also could not come at a worse time for Spain, it’s banks and the Autonomous Communities of Spain

Moody’s announcement also, in my view, includes one major surprise. Santander UK plc , is the UK subsidiary of the Spanish bank but holds 90% of its assets in the United Kingdom. Unlike many other banks in Europe, Santander (UK) has only 1% exposure to Eurozone Sovereign debt.

Santander (UK) plc is very much, in its operations, a British bank, sterling based, albeit with a Spanish owner.

Moody’s downgrading also affects various of the Autonomous Communities (Regions). These are thought to be unable to meet their deficit reduction targets for 2012.

  • Catalonia
  • Murcia
  • Andalucia
  • Extramadura

On this subject, I would also recommend these posts;

Are UK Banks Safe? (October 2011)

Five Spanish Banks fail EU Stress test (July 2011)

La Torre Fx – Foreign Exchange (Beating the Banks)

There is much more information on many subjects in the BLOG ACHIVE

David Goodall
Financial Pages in Spain