S&P's bank downgrades are expected to affect funding costs

11/30/2011 | Reuters

Standard & Poor's downgraded ratings of 15 major banks because of revised internal models rather than changes at the financial institutions. However, the downgrades are likely to affect the banks' short-term funding costs "because they will be sidelined by money market funds who are the traditional buyers of that short-term paper," said Andrew Fraser, investment director at Standard Life. "The timing of the ... statement is perhaps more significant than its content because it comes at a time when liquidity is under pressure at banks."

View Full Article in:

Reuters

Published in Briefs: