French banks in rating downgrade
THE European Central Bank's (ECB) mammoth bid to stabilise the banking system hit its first hurdle yesterday after France's three most powerful banks had their credit ratings slashed.
The move, by ratings agency giant Moody's, means BNP Paribas, Credit Agricole and Societe Generale will now have to pay more to borrow money and will generally be viewed as less stable.
One of the main reasons cited for the downgrades was a "significant deterioration" in funding and liquidity markets.
This is something that would make it harder for the banks to raise cash to pay their day-to-day expenses.