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Moody's downgrades banks in Germany, Austria

The ratings agency downgraded six German banks and Austria’s three largest lenders due to their exposure to the deepening euro zone crisis.

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Moody's is reviewing the ratings of 114 European banks. (AFP/Getty Images)

Ratings agency Moody’s today downgraded six German banks, including No. 2 lender Commerzbank, and Austria’s three largest lenders due to their exposure to the deepening euro zone crisis.

According to the Telegraph, Moody’s cut the ratings due to concerns about the “increased risk of further shocks emanating from the euro area debt crisis, in combination with the banks’ limited loss-absorption capacity.”

Moody’s lowered by one notch the long-term credit ratings of Germany's Commerzbank, DekaBank, DZ Bank, regional banks LBBW, Helaba and NordLB, Agence France-Presse reported.

The credit rating cuts were part of a broader review of 114 financial institutions in the euro zone and were less savage compared with downgrades for banks in Spain and Italy, Reuters reported.

More from GlobalPost: Moody's downgrades 16 Spanish banks

The Financial Times said a decision on Germany’s largest lender, Deutsche Bank, would be made separately this month.

In Austria, Moody’s downgraded the three biggest banks -- Erste Group Bank, UniCredit Bank Austria and Raiffeisen Bank International – by one to two levels, Bloomberg reported.

The BBC noted that the strength of European banks, particularly those in weaker economies such as Spain, Italy and Greece, has become the focus of the region’s troubles.

Moody’s said in April that it would begin releasing conclusions to its reviews of European banks and global financial security firms.

More from GlobalPost: Italy banks: Moody's downgrades credit ratings of 26 lenders
 

 

 

http://www.globalpost.com/dispatch/news/regions/europe/120606/moodys-downgrades-banks-germany-austria