Moody’s cuts 11 European banks’ ratings

Moody’s has cut the ratings of 11 European banks and said it would cut again if Greece ditched the euro, kicking off a long-awaited round of downgrades for major European institutions. Moody’s Investors Service said on Friday it had taken action against five Dutch banking groups, three French banks and one each from Belgium and Luxembourg. Investors shrugged off the news after central banks from major economies had indicated they were prepared to take steps, including coordinated action, to stabilise markets in the wake of Greece’s election on Sunday. The benchmark FTSEurofirst 300 index was up 0.7 per cent at 0835 GMT. Still, the downgrades will only add to pressure on European Union leaders to sort out the region’s debt crisis. Moody’s was expected to downgrade some of the world’s biggest banks by the end of June, which would widen the gulf in prospects between the strongest banks and weaker rivals. Bank of America Corp, Citigroup and Morgan Stanley are among those whose ratings could be affected.On Friday, Moody’s cut four Dutch banks by two notches with one moved a single step lower. It kept a negative outlook for Dutch bank and insurer ING Bank, one of those cut two notches, meaning the rating could be cut again. ING shares were up 2.8 per cent, while SNS Reaal, whose banking unit was also downgraded, rose 3.9 per cent, buoyed by the better tone in the broader market. “Today’s actions reflect Moody’s view that Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond,” it said.from the gulf today.