Moody's world biggest bank downdrade adds to eurozone worries

The US rating agency Moody’s downgraded 15 world major financial institutions with the credit ratings lowered by one to three notches. The news triggered the indices down amid renewed concern on the euro crisis.

Moody’s decision pushed down indices during Asian trading with banking among the weak performers, while European stocks are trading with most indices down. American financial majors Citigroup Inc., Goldman Sachs Group, Morgan Stanley and J.P. Morgan Chase & Co. were cut by two notches with the negative outlook, while Bank of America Corpwas cut one notch and its outlook is also negative.In the U.K., Moody's cut the credit rating of Royal Bank of Scotland Group and HSBC Holdings by one notch and Barclays was cut two notches. All banks have a negative outlookThe ratings agency also cut its ratings on France’s BNP Paribas, Germany’s Deutsche Bank and even Switzerland’s Credit Suisse. Royal Bank of Canada also saw its rating cut by one notch.“All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities”, Greg Bauer, Moody's Global Banking Managing Director, said in a statement.President of Russia’s largest lender Sberbank Herman Gref said that “the markets didn’t react to the downgrade decisions.”“I don't think those actions have any additional impact. Our ratings don’t have a single reason to be downgraded. We’re currently in a very stable situation which can be the envy of many Western partners."Meanwhile Citigroup, Morgan Stanley as well as Royal Bank of Scotland announced they disagree with Moody's assessment. Morgan Stanley suggested Moody’s hadn’t fully considered the actions the bank has taken to fix its finances.Moody’s announced a broad review of financial institutions across Europe and the US in mid April. The rating agency cut credit ratings of 16 Spanish banks, 26 banks in Italy, as well as banks in Portugal and the Nordic region.As investor sentiment was dampened by the rating cuts, Italian Premier Mario Monti aggravated tensions by announcing that eurozone leaders have just a week to save the single currency.If EU leaders fail to find a solution to beat the crisis, the region will be left in economic paralysis as "there would be progressively greater speculative attacks on individual countries, with harassment of the weaker countries," Monti warned.“They [downgrades] were justified a half decade ago. These rating agencies Moody’s, the S&P, Fitch try to front run the crisis, that’s coming,” Charie McGrath, economy blogger and the founder of Wide Awake news, told RT. “They have a black eye since 2008-2009 for no seeing the economic landmine the planet stepped down.” "They needed a shock to the market, they needed to get political cover, not only the politicians here in the US, because, let’s face it, the US is the largest provider of funding to the IMF, but they need to get political coverage to the folks in Europe as well., so they can continue the process of evaporating representative government there, consolidating more power and handing it over to Brussels," McGrath added."We will see more “Mario Montis”, let’s call him what he is – he’s a technocrat, he was installed just like we saw inside Greece. We will see the crisis escalate; we will see fear and panic. I ‘m sure fear and panic have been engineered in order to implement the agenda that they talked about for a decade now. You need to have fear in order to take away people’s sovereignty".