Moody’s Downgrades Italy Credit Rating
Moody’s downgraded Italy’s credit rating three notches, bringing it from an A2 to an Aa2, which is lower than Estonia and matches Moody’s rating of Malta. The rating agency cited a “material increase” in funding risks for EU countries with high levelsof debt. Moody’s cautioned that further downgrades for Italy were possible.
Morgan Stanley Battles Rumor Mill
Morgan Stanley is down 48.5 percent so far this year and likely to fall even lower as it battles rumors over its derivatives and credit exposure. The issues began Friday morning when a popular financial blog linked to a Bloomberg article that Morgan Stanley’s credit-default swap spreads had widened. Morgan Stanley is the smallest of the big Wall Street banks and therefore the most vulnerable.
Market Soars as EU Seeks to Rescue Troubled Banks
As EU finance ministers look for ways to save the region’s banks, the world markets are gaining. After the report Wednesday, Wall Street jumped 4 percent, Eurofirst rose 1.6 per cent and the FTSE100 went up 1.1 per cent; the increases were driven primarily by gains for EU bank stocks.
Bank of New York Mellon Sued by State
Both the State of New York and the federal government are suing Bank of New York Mellon; the separate civil lawsuits were filed Tuesday, October 4. The allegations in both cases are that Bank of New York Mellon routinely overcharged foreign transaction fees. State pension funds and thousands of investment funds were affected.
Bernanke Says No Quantitative Easing, Yet
Federal Reserve Chairman Ben Bernanke announced that the Federal Reserve will take additional steps to aid the US economy, which he describes as “close to faltering.” Bernanke would not comment as to whether quantitative easing was in the works, but he did explain that he had no immediate plans to do so. The market rose briefly after Bernanke’s speech but had fallen to their Monday levels by the end of the day.