Noonan to meet ECB boss Draghi on bank debt
Finance Minister Michael Noonan is to meet the European Central Bank president Mario Draghi in Frankfurt today, after reports that the ECB could be set to change policy on the burning of senior bondholders.
The issue is set to be discussed as part of negotiations aimed at getting Ireland a better deal on its €64bn euro bank debt.
Meanwhile in the wider European economy, ratings agency Moody’s Investors Service has downgraded the credit ratings for 13 Italian banks three days after cutting the Italian government’s bond rating.
The new rating for government bonds – Baa2 – is two notches above junk status.
The government’s lower rating means Moody’s believes it is at greater risk of defaulting on its debts and “indicates a similarly increased risk that the government might be unable to provide financial support to its banks in financial distress”.
Moody’s dropped seven banks by one notch, the other six by two notches. They all remain investment grade.
It says fragile market confidence and financial problems in Greece and Spain have increased the risks Italy faces and it is worried about a diminished willingness among overseas investors to buy Italy’s bonds.
