Europe, Moody's | featured news

Moody's Investors Service Friday defended its decision to issue a slew of downgrades to Europe's biggest lenders after several of the continent's banks hit out over the "backward" nature of the review.

Credit ratings agency Moody's Investors Service cut its rating on Spanish government debt on Wednesday by three notches to Baa3 from A3, saying the newly approved euro zone plan to help Spain's banks will increase the country's debt burden.

Moody’s Investors Service downgraded Spain’s credit rating Tuesday and warned that France’s rating could also be at risk, citing both nations’ vulnerability as Europe struggles to manage its persistent debt crisis.

Moody's Investors Service on Tuesday cut Italy's bond ratings by three notches, saying it sees a "material increase" in funding conditions for euro zone countries with high levels of debt.

European stock futures declined Wednesday as Moody’s Investors Service downgraded Societe Generale SA and Credit Agricole SA and Chinese Premier Wen Jiabao said developed nations should not rely on China to bail them out. U.S. futures and Asian shares dropped.

After a series of positive announcement from Greek FinMin Venizelos, rumors that Moody's would downgrade French banks and Germany was preparing for a Greece to default send equities tanking, particularly French banks.

Nearly one-third of 91 European banks undergoing the latest round of public stress tests could need external support to be brought up to scratch, Moody's said.

Moody's slashed Greece's credit rating by three notches on Monday, raising the specter that the distressed euro zone sovereign may be forced to restructure its debt, perhaps even before 2013.