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Fitch downgrades six global banks

Fitch Ratings has downgrade the long-term credit rating of six of the world’s biggest banks because their business models are “particularly sensitive” to the challenging financial markets.

The banks include Bank of America, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank and Goldman Sachs.

Fitch says the challenges the banks face are both regulatory, in which they will have to hold more capital, and economic, as a result of the eurozone crisis and the global economy as a whole.

In a note, published yesterday, Fitch says: “The actions were motivated by Fitch’s view that the bank’s business models are particularly sensitive to the increased challenges the financial markets face. These challenges result from both economic developments as well as a myriad of regulatory changes.

“Fitch incorporated the significant progress it sees the banks have made in building up capital and liquidity buffers to resist market challenges, which has kept the downgrades to one or two notches.”

On November 30, rival rating agency Standard & Poor’s downgraded the long-term credit ratings of several major banks including Barclays and HSBC following changes to its ratings criteria.

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