The credit ratings agency Moody's has downgraded 15 global banks and financial institutions. The UK banks downgraded were Royal Bank of Scotland, Barclays and HSBC. Lloyds also had its rating cut by Moody's in a separate announcement. Due to this we could potentially see risk aversion in the market.
An independent audit of Spanish banks has found that they will need up to €62 billion in extra funding. European authorities had already agreed to provide up to €100 billion ahead of assessments of the banks' needs. Jean-Claude Junker, the head of the EC, said that Spain could make a formal request for financial assistance before next Monday.
Greek Prime Minister Antonis Samaras has announced his new cabinet, which is dominated by MPs from his conservative New Democracy party. Vassilis Rapanos, the chairman of the National Bank of Greece, has been given the key post of finance minister. The socialist Pasok and Democratic Left parties have two party officials in the cabinet, but have barred their MPs from taking part. It is believed they may not want to be associated with austerity measures.
Germany's ruling coalition has reached a deal with the opposition enabling the EU's new budget treaty to be ratified by the German parliament next week. The deal with the centre-left opposition Social Democrats (SPD) and Greens followed weeks of negotiations.
Head of IMF Christine Lagarde encouraged the ECB to reduce their interest rates due to current circumstances. Lagarde also believes that a collective bond, European bonds, is the solution to gain market confidence.
Looking ahead today, there is no significant data from the UK so leading into the weekend investors eyes will be on the Eurozone. This morning we have seen the Pound somewhat recover against the Euro but for how long this will continue who knows.
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