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Moody's downgrades several German banks

The Local · 6 Jun 2012, 08:53

Published: 06 Jun 2012 08:53 GMT+02:00

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The agency said its decision was taken because of "increased risk of further shocks emanating from the euro area debt crisis," and the banks' inability to compensate for losses.

"Moody's Investors Service has today taken various rating actions on seven German banks and their subsidiaries, as well as one German subsidiary of a foreign group," a Moody's statement released Wednesday said. "As a result, the long-term debt and deposit ratings for six groups and one German subsidiary of a foreign group have declined by one notch, while the ratings for one group were confirmed."

Frankfurt-based Commerzbank was reduced from a rating of A2 to A3, while a review of Deutsche Bank, Germany's largest lender, will conclude later.

Other banks to be downgraded included Unicredit Bank, DekaBank, DZ Bank, as well as Landesbank Baden-Württemberg and Norddeutsche Landesbank - all with stable looks.

Moody's also affirmed WGZ Bank's rating at A1, but with a negative outlook.

But Moody's also underlined that the ratings of German banks have declined by less compared to other European banks, because of relatively good conditions in Germany's domestic banking market, low unemployment, and low household and corporate debt levels.

Story continues below…

The Local/bk

The Local (news@thelocal.de)

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Your comments about this article

10:21 June 6, 2012 by smart2012
merkozy well done!
12:03 June 6, 2012 by Bigfoot76
The only reason anyone has even heard of Moodys is because of the stories about them downgrading everyone in the world. It is almost as if they have to downgrade someone just so they can be remembered.
12:41 June 6, 2012 by MrNosey

Did you pee your pants this much when they downgraded US and UK banks last year?
12:45 June 6, 2012 by insight101

No, we leave that to all the other Europeans...Seems to be their greatest joy in life.
12:50 June 6, 2012 by smart2012
@MrNosey, me not, but the German populistic press did...... :-) I do not personally care as I have invested (luckily) in properties, not in (crappy) bank system, but I have experienced German populistic press teaching others on what they should do, so now sorry, I cannot resist :-)

and merkozy supported it and supported people like Ackermann, which led to the crisis we are in today
16:13 June 6, 2012 by Beachrider
Some people want to 'shoot the messenger'. Your choice.

There are four agencies that dominate the USA/EU marketplace: S&P, Fitch and D&B all do this stuff. The fact that Moody did this first made it worth reporting to an EU audience.

This credit rating business doesn't win friends when there is lowering of ratings. We all learned in 2008 that deferring the downgrades has its own issues.

The EU and the USA voluntarily submit to this free enterprise ratings mechanism. The alternative is stronger governmental control of something that TODAY evaluates governments & businesses.
17:06 June 6, 2012 by siba
Smart2012: I did not read about it... What kind of press do you read? And if you read international press look at the US, the UK, France... they all think they know better what other countries or the EU or Germany or Greece should do... just read the NY times or watch BBC news....

However, these agencie like Moody fuel economic problems and have indirect influence on the well being of people. They should be forbidden and the financial market has to be regulated!
17:46 June 6, 2012 by Leo Strauss

Its not the nationality but the orientation of the news source that matters. Find out what sources are consistently correct over time and go with them. Most of the reliable ones are alternative-independent journalists, while the mainstream media must be read with a great degree of skepticism. Do read the NY Times, BBC, Bild and so on to see their agenda- where they are trying to steer us. While you`re at it, check out Operation Mockingbird. :)
18:01 June 6, 2012 by rwk
Sorry to the unknowing, but yes, Moody's is well-known. Maybe you've just heard of S&P but other ratings firms do exist.
23:09 June 6, 2012 by siba
@Leo Strauss: Actually you are absolutely right. I just was referring to smart2012 who intended to make it appear that only the German populist press would state what they think is good for other countries... And no, I do not read Bild, is there anything to read? I think it mostly consists of big pictures ;)
02:08 June 7, 2012 by raandy
This is another swipe at Nationalism , the truth is that this is a Global Banking crisis.

Every Nation has been given a downgrade or two.
02:24 June 7, 2012 by catjones
Leo Strauss...everyone has an 'agenda' and all media purport to report the Truth. Those you agree with 'are consistently correct over time'.

Better advice: cast a wide net and read both the ones you agree with and the ones you don't. Most often, new ideas are rejected and then later become mainstream.
06:44 June 7, 2012 by KerryMann
From the U.S.

We all learned that the ratings agencies helped cause the financial crisis of '08 because they were giving AAA ratings to investments that were "crap" and because of this the world bought all our mortgaged backed securitities and they were bundled with fraudulent loans that were impossible to every be paid back by the person buying the house because they were called "Lier loans" because all the info as far as income was a lie".

This is why no one should have any respect for these ratings agencies and they didn't go to jail. Employees were interviewed during the Congressional investigation and e-mails that stated the employees knew the stuff they were giving AAA ratings were just JUNK but they didn't care because the ratings agencies are paid a fee for the things they rate.

This is stupid and these companies should be shut down after Americans learned the truth about these companies.
12:42 June 7, 2012 by Englishted
I have to agree with @KerryMann.
14:41 June 7, 2012 by Leo Strauss
@ catjones

I whole-heartedly agree with you that everyone has an agenda and that all purport to tell the truth. And as I wrote, I do check in with the BBC, NY Times and other establish media in order to gain a wider perspective, although on many issues they are worse than unreliable and I view them as propaganda organs. Still read them.

I must disagree with you on the next point. I don`t think that my agreement determines whether or not the sources are consistently correct. You may advocate solipsism at your own peril, but please don`t attribute this to me. ;) I trust my sources because their predictions and analysis have been consistent over time in the really real world.

Check this out, cat:

18:54 June 7, 2012 by AlexR
@MrNosey @insight101:

It's called Schadenfreude in English... oops... it's a German word.

@siba: "And no, I do not read Bild, is there anything to read? I think it mostly consists of big pictures."

Then maybe you should read the Bild and make your own opinion. After all, most of the journalists, politicians, as well as a big part of German population read it. As Bild boasts, it is the "biggest newspaper in Europe" with circulation of 3-5 million and readership of 12-18 million, i.e., it reaches 15% to 20% of the German population.

And if you read it, don't be surprised, but it doesn't consist of "big pictures" only. It also consists of a very clear rightwing populist agenda that influences many of the policies of the current government and much of the German public opinion.



After all, their motto is "Bild Dir Deine Meinung" which can be loosely translated as "we form your opinion so you don't have to". No, really, they say that!
01:29 June 9, 2012 by siba
AlexR: Your translation is an interpretation. "Bild dir deine Meinung" just harmlessly means: Form yourself your opinion.

Bild(e) (to form) and Bild (name of newspaper): it is just a play of words.

Yes, Bild is populist and many read it, but I know that RELATIV to the German population of 80 Million it is not read so much compared to other populist newspapers in other countries. The most wide-spread populist newspaper relative to the population is the Kronen-Zeitung in Austria. It reaches 43,7 % (!) of the Austrian population (more than twice as much as the Bild-Zeitung does in Germany).

The good thing in Germany is that it is the country in Europe where the most people read newspapers and after Bild there are many high-qualitiy newspapers like Süddeutsche Zeitung, Frankfurter Allgemeine, TAZ, ... and many many regional ones, and many weekly ones like die Zeit, der Spiegel...

There is big choice and at every corner and in each cafe you get all newspapers, even from other countries.

And I have checked Bild-Zeitung, very big pictures with very little and simple texts. This can only be attractive to people who do not really like to read or think.
12:57 June 9, 2012 by AlexR
@siba: "Your translation is an interpretation."

It's neither MY translation nor MY interpretation. I just quoted and linked the Spiegel article where the translation comes from, which you obviously didn't bother to read.

As for the rest of your assumptions, again, please read the linked articles of Guardian and Spiegel and see if you disagree with their arguments. When Bild's readership is 12-18 million, i.e., it reaches 15% to 20% of the German population, you can't seriously say that "it is not read so much".
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