S&P downgrades Ireland on financial sector cost

Discussion in 'Wall St. News' started by ASusilovic, Aug 24, 2010.

  1. SAN FRANCISCO (MarketWatch) -- Standard & Poor's said late Tuesday it downgraded Ireland's long-term sovereign credit rating to AA- from AA because of the high cost to prop up that country's financial sector. The outlook is negative. "The downgrade reflects our opinion that the rising budgetary cost of supporting the Irish financial sector will further weaken the government's fiscal flexibility over the medium term," said Trevor Cullinan, an S&P credit analyst, in a statement.


    What clever people work at S&P! Must take them years to downgrade US sovereign credit rating. It´s always easier to downgrade "peripheral" countries. About time for a regime change. Abolish all rating agencies ! :mad: :mad: :mad:
  2. There’s really nothing quite like a punch-up between a downgraded sovereign and a rating agency.

    And Ireland has come out swinging in the wake of S&P’s overnight downgrade.

    From Reuters (emphasis ours):

    In a strongly worded statement, the National Treasury Management Agency said it disagreed with S&P’s view that Ireland faced substantially higher costs to bail out its ailing banking sector.

    “In terms of the specific analysis by S&P, this is largely predicated upon an extreme estimate of bank recapitalization costs of up to 50 billion euros,” the NTMA said.

    “We believe this approach is flawed.”

    The market has seen this coming — check out Ireland CDS, which Markit said stood at 306bps on Wednesday, little impacted by the move. So we’re not sure why the Irish are so angry.

    Then again, the downgrade did trigger this.

    Either way, its provided some entertainment on a quiet summer trading day.