European Bank Woes Stir Global Fear
(New York Times) — Moody’s downgraded two of France’s biggest banks Wednesday and maintained the rating for a third bank under review, highlighting the escalating worries about the European banking system and renewing jitters in the global financial markets. Mounting worries about the exposure of three leading French banks — Société Générale, Crédit Agricole and BNP Paribas — to Greece and their ability to handle a potential default by Greece on its debt had sent the stocks of all three financial institutions sharply lower in recent days. On Wednesday, Moody’s downgraded its ratings for Société Générale by one notch to Aa3 and for Crédit Agricole to Aa1, citing their exposure to the Greek economy and the fragile state of bank financing markets. It left BNP Paribas at Aa2, saying the bank had “ an adequate cushion to support its Greek, Portuguese and Irish exposure,” but kept it under review.