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German banks take US rating agency hits

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German banks take US rating agency hits
Photo: DPA
14:58 CEST+02:00
Deutsche Bank and Postbank were among a number of global banks downgraded by the American credit ratings agency Moody's over the last couple of days amid fears of how the eurozone crisis could affect them.

Moody's announced it was downgrading Postbank from the top A1 rating to A2 on Friday. The decision follows a similar move on Thursday when Deutsche Bank was downgraded two places from AA3 to A2.

Given the current financial turbulence, pressure is increasing on Germany to release funds from the European rescue funds to help the ailing banking sector across Europe, Der Spiegel magazine reported on Thursday.

At this week's meeting of the eurozone group, head of the International Monetary Fund Christine Lagarde demanded that money be released directly to European banks without going first via EU member state governments, something the German government has opposed so far, the magazine said.

German Chancellor Angela Merkel on Friday reiterated her opposition to allowing Europe's crisis funds to recapitalise debt-stricken banks directly, stressing that EU treaties did not allow this.

"It's not that I do not want to [help] but the treaties are set up in such a way that the governments are the partners," she said, adding that it was not her decision to make.

"If I simply gave money to a Spanish bank, or other bank, I can't say what that bank should change, because I'm not responsible. I'm the German Chancellor, I can only say that to my banks."

AFP/The Local/jlb

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