Europe Talks Debt Crisis while Moody's Downgrades RBC

Jun 22, 2012

By Jane Brown

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Leaders of Germany, France, Italy and Spain are gathering in Rome to seek agreement on ways to ease the widening debt crisis in their currency union.  Any proposals agreed at today’s summit will be brought to a wider gathering of EU leaders next Thursday and Friday. 

Among the items on the agenda are a proposal by Italian Premier Mario Monti to use a bailout fund to buy sovereign debt to bring down interest rates for countries like Spain and Italy and a possible tax on financial transactions.

The meeting caps an intense week, which included the downgrade by Moody’s of 15 of the world’s largest banks, including the Royal Bank of Canada. 

U-S giants Citigroup, Goldman Sachs, Bank of America and J-P Morgan Chase are also affected by the Moody’s downgrade.  

RBC customers are being reassured they won’t be affected by a downgrade in the bank’s credit rating.

Moody’s cut the Royal’s long-term deposit rating to A-a-3 from A-a-1, but R-B-C says the change will have minimal impact on its business.

The ratings agency says it’s especially concerned about banks with significant business in the financial markets — because those markets have become so volatile.

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