Currency Calculator

Use the currency calculator to calculate the rate of exchange.

GBP Flag

1 GBP = 1.12245 EUR

EUR Flag

1 EUR = 0.89041 GBP

Change Currencies Currency Providers

US banks pull plug on EU lending

compare money transfer free voucher

USA banks are pulling the plug on EU lending

Financial companies may soon be looking to make an in the wake of the US money market's lenders withdrawing of all but very short-term loans to European banks.

According to a report by the Financial Times, which quotes figures from rating-company Fitch, the top ten biggest US money-market funds have cut lending to European banks by nearly nine per cent in the course of the month.

Spanish and Italian banks have been among the hardest hit, with both regions accounting for 0.8 per cent of the $1.57 trillion (£964 million) of assets in prime money-market funds, down from 6.1 per cent in 2009.

The move is thought to have been spurred on by the downgrading of Greece following a debt restructuring deal which redefined the time that the country would pay off its debts.

Moody's rating agency views the unilateral decision as a form of default and dropped the country's debt rating by three notches from Caa1 to Ca - two shy of a default rating.

"The announced EU programme... implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100 per cent," the agency said.

As a result of the debt restructuring deal, the agency estimates that investor losses will likely hit 20 per cent.

However, the support packaged from eurozone nations as well as private companies was welcomed as potentially creating a stable future for Greece.

The agency continued: "However, Greece will still face medium-term solvency challenges: its stock of debt will still be well in excess of 100 per cent of GDP for many years and it will still face very significant implementation risks to fiscal and economic reform."

Leave a comment

What's the press saying about Compare Money Transfer Ltd?

Top 10 Money Transfer Companies