Rating agency warns of ‘contagion risk’ from Greek debt crisis

| May 6, 2010 | 0 Comments
Rating agency warns of ‘contagion risk' from Greek debt crisis

Credit rating agency, Moody’s, has today warned that the credit rating of banks in Britain, Ireland, Italy, Portugal and Spain are at risk of being damaged because of “contagion” from the Greek debt crisis.

Asian shares have already fallen sharply today as fears mount that the crisis would spread to other European countries.

Meanwhile, Moody’s said banking systems faced “very real, common threats” from the fallout from Greece.

In a report, Moody’s said: “the potential contagion of sovereign risks to banking systems could spread to other countries such as Portugal, Spain, Italy, as well as Ireland and the UK.”

Yesterday, ratings agency Fitch said it was considering a downgrade of Portugal’s Government debt.

In the meantime, in an interview with French newspaper, La Parisien, the head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, admitted earlier this week that the possible spread of the crisis was a concern.

He said: “We have to succeed in avoiding contagion… we should remain vigilant.”

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