Fitch Downgrades 8 Global Banks Including BNP, SocGen, BofA, Deutsche, Morgan Stanley - News and Current Events | futures io social day trading
futures io futures trading

Fitch Downgrades 8 Global Banks Including BNP, SocGen, BofA, Deutsche, Morgan Stanley
Updated: Views / Replies:636 / 0
Created: by Quick Summary Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Thread Tools Search this Thread

Fitch Downgrades 8 Global Banks Including BNP, SocGen, BofA, Deutsche, Morgan Stanley

  #1 (permalink)
Quick Summary
Fitch Downgrades 8 Global Banks Including BNP, SocGen, BofA, Deutsche, Morgan Stanley

Every day after close it is one endless downgrade parade in which any of the permutations of rating agencies and either European sovereigns or banks get up and start playing musical chairs with each other. Then proceed to sit down for the overnight session. One of these days all the chairs will have been pulled. The banks cut are Bank of America, Barclays, BNP, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Societe Generale, UBS. Now we know that even creditors do not want to trigger any ratings downgrade covenants because it would offset what is likely a terminal margin call, but at some point someone will need to do through the various bond docs and find out just who (ahem Bank of America) will need to post far far higher collateral as a result of all these relentless downgrades.

From Fitch


Fitch Ratings-New York-15 December 2011: Fitch Ratings has today taken rating actions on nine global trading and universal banks (GTUBs). The actions complete its assessment of the GTUBs, carried out in conjunction with a broad review of the ratings for the largest banking institutions in the world. Fitch has downgraded eight issuers' Viability Ratings (VRs) and affirmed one, removing them from Rating Watch Negative where they were placed on Oct. 13, 2011.

For a list of key rating actions refer to the end of this release. Full lists of rating actions affecting each bank are published today in separate comments on the affected banks.

The impact of VR downgrades on the banks' Issuer Default Ratings (IDRs) has depended to some extent on the level of their Support Rating Floors. IDRs are the higher of the VR and Support Rating Floor.

The VR downgrades reflected challenges faced by the sector as a whole, rather than negative developments in idiosyncratic fundamental creditworthiness.
However, Fitch differentiates among the peer group, in relation to its business mix, capitalisation, liquidity strength and market position.

The actions were motivated by Fitch's view that the GTUBs' business models are particularly sensitive to the increased challenges the financial markets face.
These challenges result from both economic developments as well as a myriad of regulatory changes. Fitch incorporated the significant progress it sees the banks have made in building up capital and liquidity buffers to resist market challenges, which has kept the VR downgrades to one or two notches.

Nonetheless, Fitch continues to be of the opinion that, however well-managed, the structural aspects of their funding, earnings, and leverage, predispose GTUBs to vulnerability to market sentiment and confidence, particularly during periods of exogenous financial stress. Furthermore, the complexity of their business models and exposure to fat tail risk make it more difficult to assess the size of loss that could emerge rapidly from unexpected events.

Over time market conditions are likely to ease, but Fitch expects market volatility to remain above historical averages and economic growth in developed markets to remain subdued for a prolonged period. This makes many business lines in securities operations more difficult, due to lower activity and higher funding costs.

While regulation enhances creditworthiness of banks generally by forcing them to hold higher capital and liquidity and curbing risk-taking in some areas, it also restricts earnings potential and increases costs, which encourages increasing the scale required to remain efficient and will likely reduce the number of market participants.

Reshaping business models to address the challenges they are currently facing will be an ongoing focus for GTUBs over the coming two years. It remains uncertain which of the GTUBs will emerge as the strongest once the new regulations are fully implemented and business appropriately adjusted, although Fitch views leading market positions across various products and geographies as a good indicator, especially if backed by substantial core capital.

Leading commercial banking or wealth management franchises are also an important consideration for Fitch's ratings of universal banks. For many of these banks, higher weighting of securities businesses on earnings and risk profiles is a negative factor in their ratings, and establishment of a more balanced business mix could be a positive ratings driver.

Fitch believes the GTUBs are much better placed to deal with difficult market conditions today than in 2008. Capitalization and liquidity are improved and vulnerabilities reduced. The rating actions taken were based on Fitch's assessment of creditworthiness against the relatively high rating levels that the GTUBs previously had.

The GTUBs have been improving liquidity, which has been a particular area of focus for the group. These banks ensure that they have significant liquid reserves in order to be able to meet obligations even if funding markets were to close for a significant period of several months. Although Fitch views such measures positively, the liquidity position would be less of a defense against any 'bank specific' concerns, should they arise, because a sound liquidity profile is expected of all the GTUBs.

Fitch notes that the exact specification of various metrics, along with any adjustments made, can influence the relative ranking of the various GTUBs. These metrics can also vary significantly over time, can be backward looking and make it more important to take a more balanced, forward view of creditworthiness.
Fitch's focus in evaluating the banks has been on those that have the best positions in diversified the product areas that are viewed as having the lowest risk.

The following highlights Fitch's ratings actions:

Bank of America Corporation

--Long-term IDR downgraded to 'A' from 'A+';

--Short-term IDR downgraded to 'F1' from 'F1+';

--Viability Rating downgraded to 'bbb+' from 'a-'.

Barclays plc

--Long-term IDR downgraded to 'A' from 'AA-';

--Short-term IDR downgraded to 'F1' from 'F1+';

--Viability Rating downgraded to 'a' from 'aa-'.

BNP Paribas

--Long-term IDR downgraded to 'A+' from 'AA-';

--Short-term IDR affirmed at 'F1+';

--Viability Rating downgraded to 'a+' from 'aa-'.

Credit Suisse AG

--Long-term IDR downgraded to 'A' from 'AA-';

--Short-term IDR downgraded to 'F1' from 'F1+';

--Viability Rating downgraded to 'a' from 'aa-'.

Deutsche Bank AG

--Long-term IDR downgraded to 'A' from 'AA-';

--Short-term IDR downgraded to 'F1' from 'F1+';

--Viability Rating downgraded to 'a' from 'aa-'.

The Goldman Sachs Group, Inc.

--Long-term IDR downgraded to 'A' from 'A+';

--Short-term IDR downgraded to 'F1' from 'F1+';

--Viability Rating downgraded to 'a' from 'a+'.

Morgan Stanley

--Long-term IDR affirmed at 'A';

--Short-term IDR affirmed at 'F1';

--Viability Rating downgraded to 'a-' from 'a'.

Societe Generale

--Long-term IDR affirmed at 'A+';

--Short-term IDR affirmed at 'F1+';

--Viability Rating downgraded to 'a-' from 'a+'.


--Long-term IDR affirmed at 'A';

--Short-term IDR affirmed at 'F1';

--Viability Rating affirmed at 'a-'.

On Oct. 13, 2011 UBS AG's IDR was downgraded to 'A' from 'A+' due to a downgrade of its Support Rating Floor and its Viability Rating remained on Rating Watch Negative. Bank of America's VR was placed on Rating Watch Negative on Oct. 13, 2011.

The report 'Global Trading and Universal Bank Review: Resilience Increased but Challenges Remain' and the individual company rating action commentaries referenced above are available on '' and provide more specific details regarding each individual bank affected by today's actions.

More on ZeroHedge...

Reply to share your thoughts on this current event.


futures io > > > > Fitch Downgrades 8 Global Banks Including BNP, SocGen, BofA, Deutsche, Morgan Stanley

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

Wyckoff Hunting for Great Risk/Reward Ratio w/Gary Fullett

Elite only

Digging into the Details of iSystems w/Stage 5 & iSystems

Jun 5

Similar Threads
Thread Thread Starter Forum Replies Last Post
Standard And Poors Reviews 37 Global Banks, Downgrades Bulk - Full List Attached Quick Summary News and Current Events 0 November 29th, 2011 06:00 PM
Morgan Stanley On What Happens Next In Greece, And Why It Is All Very Euro Negative Quick Summary News and Current Events 0 November 1st, 2011 10:18 PM
Fitch Downgrades UBS, Puts BofA, Other Banks on Watch Quick Summary News and Current Events 0 October 13th, 2011 08:00 PM
Why Morgan Stanley Is Battling A Massive Selloff In Its Shares Quick Summary News and Current Events 0 October 5th, 2011 02:20 PM
Morgan Stanley Swings to Profit, Smashes Estimates Quick Summary News and Current Events 0 July 21st, 2010 08:30 AM

All times are GMT -4. The time now is 05:06 AM.

Copyright © 2018 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432,
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2018-05-25 in 0.06 seconds with 19 queries on phoenix via your IP