Wednesday, November 16, 2011
U.S. banks face a “serious risk” that their creditworthiness will deteriorate if Europe’s debt crisis worsens, Fitch Ratings said.
“Fitch believes that unless the euro zone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen,” the New York-based rating company said today in a statement.
Banks in the U.S. have manageable exposure tied to stressed European markets in Greece, Ireland, Italy, Portugal and Spain, “but further contagion poses a serious risk,” Fitch said. Gross exposures to larger European countries and major banks are greater than those of the five stressed countries, the rating firm said. It didn’t explain what it meant by contagion.
The six largest U.S. banks had $50 billion in aggregate exposure to the five stressed countries at the end of the third quarter, Fitch said in the report. So-called cross-border outstandings to France were $188 billion for the top five U.S. banks, according to Fitch.
source: BreakingEconomics
