Sunday, July 5, 2020
Home World Greek debt crisis: Fitch, S&P downgrade rating for 4 national banks

Greek debt crisis: Fitch, S&P downgrade rating for 4 national banks

Greek_Flag

By NewsGram Staff Writer

Fitch Ratings, one of the internationally recognized statistical agencies downgraded the ratings on four major Greek banks to “restricted default” on Monday.

The decision comes after the government ordered commercial banks to close for a week and established capital controls.

The four banks hit by the downgrade, already rated as CCC or “highly speculative”, were National Bank of Greece, Piraeus Bank, Eurobank Ergasias and Alpha Bank.

According to Fitch, the capital controls, including restrictions on withdrawals by customers, amounted to a restricted default “because the deposit restrictions affect a material part of the banks’ primary obligations.”

The banks’ “viability ratings” — which weigh the banks’ intrinsic creditworthiness — were also downgraded to a bottom-level “f” or “fail”.

“The ratings reflect exceptionally high levels of credit risk, because of the imposition of capital controls as well as poor recovery prospects in the event of the default on senior debt obligations,” said Fitch.

The banks are dependent on the European Central Bank for liquidity and the ECB decision on Sunday not to increase the liquidity due to government action reflects Fitch’s view that “these banks have failed and would have defaulted had capital controls not been imposed”.

Standard & Poor’s Ratings Services also lowered its sovereign rating on Greece to ‘CCC minus’ from ‘CCC’, saying the probability of Greece exiting the eurozone was now about 50 per cent.

Meanwhile, Greece’s Prime Minister Alexis Tsipras made a reference that his country would not make a key debt payment due to the International Monetary Fund (IMF) on Tuesday.

“(How) is it possible the creditors are waiting for the IMF payment while our banks are being suffocated?” he asked during an interview on ERT television on the eve of the payment deadline.

“Once they decide to stop the suffocation, they will be paid”, the Prime Minister further responded.

STAY CONNECTED

18,999FansLike
362FollowersFollow
1,779FollowersFollow

Most Popular

Country of Origin of Products: A Concern For Indians

As the government orders e-commerce players to display the "Country of Origin" of products sold on their platforms, a survey reveals three in ten...

JioMeet, A Make in India App to Compete with Zoom

With Reliance Jio launching a Make in India free video-conferencing application JioMeet that directly takes on Zoom, the US-based company said on Saturday they...

Instagram to Redesign it’s Story Feature

Facebook-owned Instagram is preparing to launch a huge redesign that would make it easier to watch favorite Stories in one place. Follow us on our...

In Conversation with Annu Rizvi

Annu Rizvi is a lyricist and a writer who has worked in several big projects including 'transparency', 'meri saheli’ and many others. He worked...

WhatsApp Launches First Brand Campaign in India

WhatsApp on Saturday launched its first brand campaign in India that narrates real stories about how Indians communicate daily on WhatsApp with their closest...

Government to Propose Triple Solar Manufacturing Capacity

The central government has proposed a major push to domestic manufacturing of renewable energy equipment in the country that would completely eliminate the need...

Here’s Why some Covid-19 Patients can Breathe Well with Low Oxygen Level

Researchers have found possible explanations for Covid-19 patients who present with extremely low, otherwise life-threatening levels of oxygen, but no signs of difficulty in...

Morning Walk can Help Heart Bypass Surgery Patients Get Sound Sleep

Just half an hour of morning walk can help heart bypass surgery patients get a sound sleep at night, says a study. "Many patients have...

Recent Comments