Submitted by Tyler Durden on 06/13/2012 - 16:44 Bond Creditors European Central Bank Fitch Greece Gross Domestic Product Investment Grade Investor Sentiment Ireland Portugal Rating Agencies ratings Risk Management Sovereigns
The most effective response for Spain would be to de-link sovereigns and their banks, following recent steady accumulation of sovereign debt by peripheral banks, in our view. Reducing the link between Spanish banks and the sovereign remains one of the key aspects for relieving pressure on Spain, whether this be by removing sovereign debt from balance sheets or ensuring sufficient capitalization to absorb losses. Unemployment out this morning at 24.4% shows the fragile state the economy is in, which is likely to keep pressure on Spanish yields. Against this backdrop the effect on the asset side of balance sheets is concerning, with expected weakness in non-core government bond prices coupled with a weak economy decreasing individuals' and corporates' ability to repay
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http://www.zerohedge.com/news/spain-loses-final-rating-moodys-ddowngrade-baa3-may-downgrade-further-full-text
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