Standard and Poor’s downgrades Italy banks

The credit ratings agency Standard and Poor’s has downgraded its assessment of almost all of Italy’s major banks. The review involves 34 of the 37 banks covered by the agency.

Italy’s biggest financial institutions, including UniCredit, Intesa Sanpaolo, Banco Popolare, Banca Nazionale del Lavoro and Mediobanca, are among them.

A credit rating affects the price of borrowing and the move follows S&P’s two-notch downgrade of the Italian government’s creditworthiness.

But despite the sovereign downgrade, which typically makes borrowing more expensive, Italy’s Prime Minister Mario Monti’s austerity plan has helped to bring down Italy’s 10-year borrowing rate closer to 6% from 7% for much of last year.

The action came too late to prompt share price reaction as it came after the market closed.

Source: BBC