The decline of credit quality in western Europe slowed over the first quarter of 2007 due to strong economic growth, especially in the financial sector, but an upturn in the credit cycle is not in sight this year, according to Moody's.
The upgrade to downgrade ratio rose to 0.84 over the quarter, from a low of 0.40 in 3Q06. This improvement was due to a rapid rebound from the February market blip, sustained appetite for risk, and strong corporate cashflows.
Marcus Schuler, head of integrated
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