Fitch Slaps An Unsurprising Downgrade on Spanish Banks
Yesterday, it was Moody’s downgrading U.S. banks. Today, it’s Fitch downgrading Spanish banks – 18 of them, to be exact. Unsurprisingly, the now partly nationalized Bankia SA is included in the list.
Fitch says recovery anytime soon is unlikely and it sees Spain’s recession lasting through the year.
The worsening situation has investors unconvinced that the aid of 100 million euros from the eurozone will amount to much help at all. Daniel Alvarez, an analyst at XTB Brokers, is among the skeptics:
“First we don’t know the details of the plan and it seems that in Europe everyone has a conflicting voice. Secondly, the timing is important. Urgent measures were needed but the next important event in the markets is the Greek elections this weekend.”
EU commissioner, Ollie Rehn, on the other hand, couldn’t be more optimistic that the aid will bring relief to Spain’s ailing economy:
“With this thorough restructuring of the banking sector of Spain, together with the ongoing determined implementation of structural reforms and fiscal consolidation, Spain can gradually regain confidence and create the conditions for a return to sustainable growth and job creation.”