The Hot Zone
China's newly announced air defense identification zone over the East China Sea aims to shore up national security
Current Issue
· Table of Contents
· Editor's Desk
· Previous Issues
· Subscribe to Mag
Subscribe Now >>
Weekly Watch
Expert's View
Market Watch
North American Report
Government Documents
Expat's Eye
Photo Gallery
Reader's Service
Learning with
'Beijing Review'
E-mail us
RSS Feeds
PDF Edition
Reader's Letters
Make Beijing Review your homepage
Hot Links

cheap eyeglasses
Market Avenue

Latest News
Special> Debt Crisis in Europe> Latest News
UPDATED: June 14, 2012
Moody's Downgrades Spain's Government Bond Ratings

Rating agency Moody's cut on Wednesday Spain's government bond rating to Baa3 from A3 and placed it on review for possible further downgrade.

According to the statement issued by Moody's, the downgrade decision reflects some key factors.

Moody's believed that the Spanish government intends to borrow up to 100 billion euros ($125 billion) from the European Financial Stability Facility (EFSF) or from its successor, the European Stability Mechanism (ESM), to recapitalize its banking system. This will further increase Spain's debt burden, which has risen dramatically since the onset of the financial crisis.

Investors were concerned about Spain's financial situations even though the 100-billion-euro package was approved only days ago. Some investors believed that such bailout package which focused only on individual European companies is a fool's errand because those companies will soon or later be in trouble again and moreover, Spain will be short of money in the near future.

Moody's seemed to agree with such concerns. The rating agency stated that the Spanish government has very limited financial market access, as evidenced both by its reliance on the EFSF or ESM for the recapitalization funds and its growing dependence on its domestic banks as the primary purchasers of its new bond issues, and the banks in turn obtain funding from the European Central Bank.

The rating agency also said the Spanish economy was too weak.

As for the review for possible further downgrade, Moody's said it expects to conclude the review within a maximum time frame of three months.

(Xinhua News Agency June 13, 2012)

Top Story
-Protecting Ocean Rights
-Partners in Defense
-Fighting HIV+'s Stigma
-HIV: Privacy VS. Protection
-Setting the Tone
Most Popular
About BEIJINGREVIEW | About beijingreview.com | Rss Feeds | Contact us | Advertising | Subscribe & Service | Make Beijing Review your homepage
Copyright Beijing Review All right reserved