Moody's downgrades French banks

Credit rating agency Moody's has downgraded three of France's largest banks, warning their creditworthiness has been damaged by the European debt crisis.

Moody's has cut BNP Paribas and Credit Agricole from Aa2 to Aa3 and Societe Generale from Aa3 to A1, warning the banks face further funding problems until the European debt crisis is resolved. The agency said fragile lending conditions brought about by the crisis, coupled with the three banks' exposure to peripheral European debt, had been two of the key causes of the downgrades. "Liquidity and funding conditions have deteriorated significantly" for each of the banks, Moody's said, adding that the problem was likely to worsen. "The probability that the bank will face further fundin...