Wholesale funding causing more headaches, further downgrades possible-
Australian banks could have their credit ratings downgraded based on new ratings criteria at Standard and Poor's, according to The Australian.
On Wednesday, S&P's new approach led to 15 downgrades on the ratings of some of the world's biggest banks, including Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley.
Deutsche Bank credit strategist Gus Medeiros said there was a risk Australia's big four banks' ratings could be downgraded from AA to AA- because of their reliance on wholesale funding markets offshore, The Australian reported.
Aquasia credit strategist Mark Bayley told The Australian that the credit market implications of a downgrade, while small, would be yet another factor that contributed to funding costs.
