by John Galt
May 14, 2012 17:35 ET
Moody’s unleashed a firestorm with this release today piling on top of the Greece fire:
Excerpt from the official statement at the link above:
The ratings for Italian banks are now amongst the lowest within advanced European countries, reflecting these banks’ susceptibility to the adverse operating environments in Italy and Europe. Today’s rating actions reflect, to differing degrees for each affected bank, the following key drivers:
1.) Increasingly adverse operating conditions, with Italy’s economy back in recession and government austerity reducing near-term economic demand;
2.) Mounting asset-quality challenges and weakened net profits, as problem loans and loan-loss provisions are rising; and
3.) Restricted access to market funding which, if persistent, will exert added pressure on banks to reduce assets, posing risks to their franchises and earnings.
Furthermore, recent events highlight the risks for creditors from potential weaknesses in governance, controls and risk management, especially at some smaller, privately-held banks. In addition, today’s actions reflect drivers specific to some banks, which are detailed at the end of this release.
Just dang. Talk about beating a one eyed, three legged dog who has been spayed then dumped in an all female dog shelter.
Sucks to be living on the Med this year. This news on top of the anticipated Greek exit from the EMU should be enough to cause massive panic for any sane investor. But Moody’s doubled down, and my readers can check this bomb out on top of the story above by clicking on the link below: