Ratings agency Moody’s downgraded the debt of BNP Paribas , Societe Generale , and Credit Agricole on Friday, citing deteriorating liquidity and funding conditions. Moody’s cut its ratings on the long-term debt of BNP and Credit Agricole by one notch to Aa3, concluding reviews that began in June and were continued in September.

Societe Generale’s long-term debt was cut by one notch to A1.
The downgrades were driven by the increasing difficulties the banks were having in raising funding and the worsening economic outlook, Moody’s said.

The French banks’ ratings are still roughly level compared with their European peers, reflecting their strong retail operations and stable earnings.

The downgrade nevertheless comes at a sensitive time for the banks, which have seen their shares pummeled and when they have been forced to cut their outstanding loans and potential risk as available short-term funding has evaporated.

Source: The Independent/ Bangladesh/ 10th Dec 2011