French banks ratings cut as state backing weakens

THREE major French banks saw their credit ratings downgraded by ratings agency Standard and Poor’s yesterday, less than two weeks after the country itself lost its coveted triple-A status.

The long-term counterparty credit ratings of BPCE, Crédit Agricole Agricole and Société Générale were all chopped from “A plus” to “A.”

“This is a direct consequence of the methodology used by Standard and Poor’s, which builds into our rating an element of systemic support by the French state, whose own sovereign rating has been recently cut,” Société Générale announced.

The agency is also likely to downgrade Greece’s ratings to “selective default” when the country concludes its debt restructuring, though John Chambers, chairman of Standard and Poor’s sovereign rating committee claimed that will not necessarily destroy the credibility of the European Union.

“It is not a given that Greece’s default would have a domino effect in the Eurozone,” he said.