Ratings downgrades complicate matters for institutional investors

The implications of lowering credit ratings

Rating agency downgrades are expected to affect the way institutional buyers of structured products in Europe do business, say bankers. At the crux of the changes are rating agency decisions that affect the way foreign subsidiaries of banks are rated, particularly when sovereigns are downgraded and drag down subsidiaries of foreign banks. Institutional investors in countries such as Spain and Italy - where sovereign ratings have been downgraded by at least two notches - will now have to deal wit

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