Moody Downgraded 13 Banks From Italy

The rating agency Moody`s has struck again and downgraded 13 banks from Italy.

This measure was the effect of the downgrade of Italy`s credit rating on 13.07.12, Moody`s said. The rationale for this step was the increase in the cost of refinancing sovereign debt. The loss of confidence and the consequent possible loss of access to the financial market were also cited as reasons.

The government bonds were downgraded from “A3” to “Baa2,” which is two notches on Moody`s scale. Further downgrades are also expected in the near future.

Italy`s economy has deteriorated increasingly recently. One indication of this is lower economic growth and rising unemployment. This will make it difficult for Italy to make further savings in order to extricate itself from the crisis.