It has been announced overnight from ratings agency Fitch that 6 of the world’s major banks have been downgraded due to the challenging financial markets. The banks include Bank of America, Goldman Sachs, Barclays, BNP Paribas, Deutsche Bank and Credit Suisse. Fitch claimed it had downgraded the “issuers default ratings to reflect the ability of an entity to meet the financial commitments on a timely basis”. Due to the recent Eurozone crisis any bank that holds Eurozone soverign debt have had to take massive charges on the debt which has increased the fear that banks will stop lending to each other in a repeat of what we saw at the start of the global recession back in 2008. Last week Moody’s downgraded France’s 3 biggest banks due to their difficulty borrowing money.
This downgrade may be perceived by some as headline grabbing but will for sure put a lot more pressure on financial institutions and the global economy as a whole as investors lose confidence in the global economy. Only time while tell what impact this will have on the currency markets so stay in contact with your currency broker here who will be able to keep you informed of all market movement. Call us today on 0800 3285884