Moody's downgrades Spanish banks' ratings

From The Sydney Morning Herald:

Moody's Investors Service has downgraded the senior debt and deposit ratings of 30 Spanish banks, but left untouched the ratings of the country's three largest banks.

The agency acted on Thursday, two weeks after downgrading its rating of Spanish government debt by one notch to Aa2.

Moody's said its reasons for downgrading the banks included higher pressure on Spanish sovereign debt and many weak banks, a declining role within the banking system for smaller and regional banks as the sector consolidates, and what it called a weakening future support environment for banks across Europe.

Moody's confirmed the ratings of big banks Santander and BBVA and savings bank La Caixa, although with a negative outlook.

Spanish stocks opened about 1 per cent lower on Thursday after the collapse of the government in neighbouring Portugal.