No immediate rate cut on European banks: Moody's

Moody's has stated that European banks had no intention to cut interest rates immediately solely as a consequence of the US attacks. Most large European banks rated by Moody's remain characterized by widely diversified operations, primarily in their home markets. Economic capitalization ranks from ample to reassuring. The rating agency said that it would not view a temporary operational disruption of activities in such an extreme situation as a material credit event if it does not harm the respective bank's franchise and financial strength. On the other hand, the tragedy will accelerate the ongoing US economic slowdown and create a more unpredictable global environment for financial transactions. While many European banks could be hurt in a general world recession, the agency believes that at this stage the less clear possibility of such a more severe scenario does not warrant downgrades of banks' ratings.

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