Moody’s Wednesday said it has downgraded the outlook for 17 German banks after a similar move against the government’s credit rating this week, the news reports said.
The credit rating agency has cut the outlook on swathe of state-backed regional banks, known in Germany as landesbank but it also included IKB Deutsche Industriebank and Deutsche Postbank.
Many of the landesbank have struggled since the 2008 financial crisis and amid Europe’s current economic crisis that has seen growth.
According to Moody’s many banks held debt that was guaranteed by the German central or regional governments. Moody’s also warned that there would be more downgrades if there was a further deterioration of the credit worthiness of the Germany’s central or regional governments.
Moody’s said, “Today’s action follows Moody’s decision to change the outlooks on the German sovereign and sub- sovereign ratings to negative from stable.
Monday, Moody’s cut Germany’s ratings outlook from stable to negative citing exposure to European financial woes and the possible costs of more bailouts. This was the first step towards stripping Germany of its coveted AAA credit rating, a warning that no one, not even the largest economy of Europe, is immune from the eurozone’s rolling crisis.
Moody’s Investor Service is the bond credit rating business of Moody’s Corporation that represents the company’s historical line of business and its historical name. The company provides international financial research on bonds issued by the commercial and government entities.