If you enjoy the content at iBankCoin, please follow us on TwitterBRUSSELS (AP) — Rating agency Standard & Poor’s said Monday it has downgraded the creditworthiness of the eurozone’s rescue fund by one notch to AA+, putting the fund’s ability to raise cheap bailout money at risk.
The downgrade follows ratings cuts for AAA-rated France and Austria, whose financial guarantees were key to the creditworthiness of the European Financial Stability Facility.
“The downgrade to ‘AA+’ by only one credit agency will not reduce (the) EFSF’s lending capacity of euro440 billion,” Klaus Regling, the fund’s chief executive officer, said in a statement.
S&P had warned in December that it would cut the rating of the euro440 billion EFSF in line with the downgrades of any AAA country.
Joined Nov 11, 2007
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When does the US and Europe downgrade the rating agencies?
They could. They just need to reverse their prior laws forcing mutual funds and the like to only invest in high grade paper. That’d take the risk of a massive government paper divestiture off the table and crush their credibility.