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The announcement cited the EU's decision to
adopt the Bank Recovery and Resolution Directive and the Single
Resolution Mechanism to resolve failing banks as the reason for
the ratings changes for banks across 21 European countries.
The EU measures force bank bondholders to contribute to the
rescue of failing lenders under certain circumstances, in a
process known as "bail-in".
"There was no immediate trigger," Wassenberg said of the timing
of the outlook changes, which came five weeks after the European
Parliament voted in favor of the new rules.
"Given the reach of what we did, we had to discuss all the
ramifications (of the recovery and resolution directive and
resolution mechanism) and engage with the authorities."
Wassenberg said that the banks placed on negative outlook, which
include major players like Italy's UniCredit <CRDI.MI> and
smaller ones like Germany's HSH Nordbank [HSH.UL], were selected
after reviewing a number of factors including how much systemic
support is already factored into their ratings.
Banks among the 267 that Moody's covers who only got a one notch
uplift in their credit ratings because of their systemic support
were not placed on negative review, Wassenberg said, because
some measure of systemic support remained even after the new EU
measures.
Moody's already had 78 banks on negative review before the
changes late on Thursday. Moody's statement on its decision is
here: http://www.moodys.com/page/viewresearchdoc.aspx
(Reporting By Laura Noonan; Editing by Pravin Char)
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