One of the big three rating agencies has taken a dim view of how the Swiss economy is developing. Now the agency has even downgraded two regional banks.
Moody’s, the U.S. rating agency, is concerned about the economic development in Switzerland and recently cut the macro-economic profile of the country to strong from a previous very strong.
Real Estate Boom
This doesn’t sound dramatic in itself, but what makes the analysts concerned is the «exceptionally high and persistently rising» private sector debt, Moody's said in a statement. This is not least a consequence of the recent years' real estate boom. The debt levels make the private sector more vulnerable to crises.
The general analysis by Moody’s has now had a direct effect on two banks that have a strong exposure to the mortgage business and financing. The credit rating of Berner Kantonalbank (BEKB) and the Clientis Group were reduced to Aa2 from Aa1 and A2 from A1 respectively. The outlook was stable, the agency said.
Still a Top-Notch Credit Rating
BEKB responded to the downgrade saying that even with the new rating it remained a bank with a very high credit quality. Valiant, EFG International and Banque Heritage had their ratings confirmed.
