The international ratings agency
Moody's on Monday further downgraded 28 Spanish banks of up to four
notches, saying that its lower creditworthiness "not only affects
the government's ability to support the banks, but also weighs on
banks' stand-alone credit profiles."
Earlier in the day, Spanish government lodged a formal request to
its eurozone partners for financial aid of up to 100 billion euros
(about 125 billion U.S. dollars) for its troubled banking sector.
The massive cut also came after hours of Spanish Prime Minister
Mariano Rajoy's pledge to embark on more economic reforms.
"This is time for important decisions... Some have already been
taken and others will come in the coming days," Rajoy said, adding
that "we will correct what has to be corrected and we will reform
what needs to be reformed."
Moody's seemed to recognize this effort, saying that it "views
positively the broad-based support measures being introduced by the
Spanish government to support the Spanish banking system as a
whole."
It added in its report that it "will assess the impact of the
upcoming recapitalization on banks' creditworthiness and bondholders
once the final amount, timing and form of funds flowing to each
individual bank are known."
