Political impetus to implement an effective resolution plan may only emerge after a series of shocks, which may lead to more countries losing access to market funding and requiring a support program.
Economy and Finance
Pressure Mounts : Moody’s Warns EU Crisis is Threatening the Credit Standing of all European Sovereigns
As European governments prepare for a possible run on banks and social unrest, Reuters reports that key ratings agency Moody’s Investors Service warns the “euro zone sovereign and banking crisis is threatening the credit standing of all European sovereigns.”
Moody’s also noted the political impetus to implement an effective resolution plan may only emerge after a series of shocks, which may lead to more countries losing access to market funding and requiring a support program.
“This would very likely cause those countries’ ratings to be moved into speculative grade in view of the solvency tests that would likely be required and the burden-sharing that might be imposed if (as is likely) support were to be needed for a sustained period.”
Read more at: Reuters
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