Fitch set to downgrade Ireland as Belgian rating cut
Published 17/12/2011 | 05:00
FITCH ratings agency said it could cut Ireland's credit rating as early as next month. It said Ireland and other countries risk downgrades because it believes last week's European summit failed to come up with a deal to end the debt crisis.
Separately, Belgium's credit rating was cut two levels to Aa3 by Moody's, which said rising borrowing costs, slowing growth and liabilities arising from Dexia SA's breakup threaten to inflate the euro area's fifth- highest debt load.
Moody's lowered Belgium's debt rating to the fourth-highest investment grade, from Aa1, with a negative outlook, the ratings company said last night.
Fitch warns that unless the European Central Bank (ECB) takes action to end the debt crisis, it will downgrade a raft of countries.
It said a "comprehensive solution" could now be "technically and politically beyond reach".
Any of the countries named yesterday could now see their ratings cut within the month. Fitch is expected to complete the review by the end of January, according to a statement.
"The concerns held by Fitch prior to the summit remain pressing and have not been materially eased" after this month's meeting of leaders, Fitch's statement said.
"Of particular concern is the absence of a credible financial backstop. In Fitch's opinion this requires more active and explicit commitment from the ECB."
The move on 'sovereign' or state debt echoed an earlier downgrade of some of the world's most important banks.
In another move, the influential ratings agency has downgraded Goldman Sachs, Deutsche Bank and five other large banks based in Europe and the US -- blaming "increased challenges" in the financial markets.
The banks face a challenging year ahead because of both economic developments and the changing regulatory environment.
Rival rating agency S&P cut some global banks in November. JPMorgan, Morgan Stanley, UBS and Societe Generale escaped the downgrade, with their ratings "affirmed".