SG and Crédit Agricole CDS spreads tighten despite downgrade

French flag

Credit default swap (CDS) spreads on all three major French banks tightened today, despite the decision taken by Moody's Investors Service to downgrade the long-term credit ratings of Société Générale (SG) and Crédit Agricole, and to put BNP Paribas on an extended downgrade watch.

However, credit traders say the downgrades were widely expected and priced in by the market - all three firms were put on review by Moody's on June 15 this year.

SG spreads tightened from 428 basis points at close of p

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