Moody’s cuts credit rating of Spanish banks

Spain suffered another blow after ratings agency Moody’s cut the credit ratings of 16 of its banks, along with Santander UK, a subsidiary of the banking giant, Banco Santander. “The problem is, Spanish banks are too large for the government to bear all of their weight,” Alberto Gallo, head of credit research at the Royal Bank of Scotland, said. He added that Spanish banks need to make a choice and protect stronger banks. “Otherwise, Spain will go the way of Ireland – having to do a lot of austerity and potentially incurring losses for bank bondholders,” Gallo added. Spain continues to struggle with the bad debts of its banking sector, even as fears about losses have spread across Europe. Moody’s downgraded the ratings of Spain’s biggest banks, Banco Santander and BBVA.

Read more on BBC News.