Wed, Mar09, 2011 19:16:04
This time the announcement did not come as a surprise in Athens and local bankers appear reassuring that the Greek banking sector which has also been hit by the severe debt crisis that broke out in late 2009 in the country, can stand the pressure.
Moody's downgraded with a negative outlook from Ba3 to Ba1 the National Bank of Greece, Eurobank, Alpha Bank and Piraeus Bank. Moreover, downgraded with negative outlook from Ba2 to B1 the Agricultural Bank of Greece and Attica Bank.
The agency argues that the decision was taken based on the latest assessment of the worsening credit rating of Greece which will have an impact on the sector, as well as the review of their financial strength and increasing challenges regarding liquidity.
Representatives of the Greek banking system reply that the sector can overcome the downgrade and the crisis through the 30 billion euro (41.67 billion U.S. dollars) guarantee aid package of the Greek state. They argue that despite the assessments by international rating agencies, the European Central Bank will continue to accept as normal Greek state bonds.
Moody's announcement that downgrades the credit rating of Greece from BA1 to B1 with a negative outlook Monday, due to doubts that the efforts under way to solve the crisis could prove inadequate to avoid an eventual restructure of the Greek debt, was strongly criticized by Athens.
The decision was "unbalanced and unjustified" and proves the need for better regulation of international ratings agencies, said the Greek Finance Ministry.