15 European firms cut to negative outlook by ratings agency

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Deutsche Bank was among 15 European banks that had their outlooks cut to negative by Standard & Poor’s on the prospect that governments are less likely to provide aid.

Bloomberg News reports that the outlooks were lowered from stable 'to reflect our view that extraordinary government support is likely to diminish as regulators implement resolution frameworks', the ratings firm said Tuesday in a statement.

Financial overseers have been increasing regulations to limit a repeat of the bailouts that propped up lenders hobbled by the 2008 financial crisis. Switzerland and the U.K. are among nations that have stated their intention to use resolution powers to wind down struggling lenders in ways that limit the burdens on governments, S&P said.

The European Parliament approved a bill this month that requires 8% of a failing bank’s liabilities be wiped out before recourse can be made to industry-financed resolution funds and other backstops. The plan is part of an effort to make unsecured bondholders share losses when banks require bailouts.

To access the complete Bloomberg article hit the link below:

Deutsche Bank Among 15 Europe Lenders Cut to Negative by S&P

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