Wednesday, Apr 15, 2009
A another view of the downgrades - with some response from the building societes
Guardian.co.uk: Building societies' financial ratings downgraded
Building societies holding the accounts of millions of British savers were savagely downgraded to near junk-bond status by ratings agency Moody's today. In a shock warning that the sector is heading for potentially massive losses from the housing market crash...
Posted by hotfoot @ 05:00 PM (190 views) Add Comment
1 Comment
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1. Sybil13 said...
FT reported it this way ,
Moody’s said it had changed its assumptions about UK house prices in the past few months.(no green shoots then?) It also stress-tested the mutuals’ commercial loan portfolios, where it expects the performance to worsen during the next few years.
Marjan Riggi of Moody’s said: “What’s different is the loss expectation is higher than it was three or four months ago looking at the economic forecasts on housing.
“Last year we were looking at mortgage lenders and stress-testing a 25 per cent fall in house prices. In the past three or four months that assumption has changed to a 40 per cent fall, which is a considerable difference.”
On Wednesday Adrian Coles, director-general of the Building Societies Association, said Moody’s had included an extreme stress test of a 60 per cent fall in house prices
THE "ASSUMPTION HAS CHANGED TO A 40% FALL ". NO GREEN SHOOT THEN!