EU banks may face contagion
(10 May 2010 – Europe) Europe's fiscal crisis could threaten banks in Portugal, Spain, Italy, Ireland and the UK as the risk of contagion grows, presenting them with a "common threat," Moody's Investors Service said in a report.
According to Moody's each of these countries' banking systems faces different challenges of different magnitudes, but warns that contagion risk could dilute these differences and impose very real, common threats on all of them.
After Greek secured a 110 billion-euro ($US140 billion) bailout from the European Union and International Monetary Fund on May 2, Jean-Claude Trichet, the president of the European Central Bank, today called for 'decisive actions' by governments to consolidate public finances.
Spain paid the highest yield since 2008 to sell five-year bonds today. The yield premium investors demand to hold Greek 10-year bonds instead of benchmark German bunds rose to 800 basis points, according to data compiled by Bloomberg.
The 52-member Bloomberg Europe Banks and Financial Services Index fell 4.7 percent. Banco Santander SA, Spain's biggest lender, plunged 4.6 per cent to 8.01 euros. HSBC Holdings Plc, Europe's largest bank, declined 3.7 per cent to 628.4 pence and Intesa Sanpaolo SpA, Italy's second-biggest bank, fell as much as 14 per cent to 1.94 euros.
After Greek secured a 110 billion-euro ($US140 billion) bailout from the European Union and International Monetary Fund on May 2, Jean-Claude Trichet, the president of the European Central Bank, today called for 'decisive actions' by governments to consolidate public finances.
Spain paid the highest yield since 2008 to sell five-year bonds today. The yield premium investors demand to hold Greek 10-year bonds instead of benchmark German bunds rose to 800 basis points, according to data compiled by Bloomberg.
The 52-member Bloomberg Europe Banks and Financial Services Index fell 4.7 percent. Banco Santander SA, Spain's biggest lender, plunged 4.6 per cent to 8.01 euros. HSBC Holdings Plc, Europe's largest bank, declined 3.7 per cent to 628.4 pence and Intesa Sanpaolo SpA, Italy's second-biggest bank, fell as much as 14 per cent to 1.94 euros.
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