As expected in the aftermath of the concluded S&P ratings action on European sovereigns, the next action is for the rating agency to go ahead and start cutting related banks and insurers, as we noted over the weekend with many of the main European banks anticipated to see one or two notch cuts potentially as soon as today. Which is why the just released report "How Our Rating Actions On Eurozone Sovereigns Could Affect Other Issuers In The Region" will be read by great interest by many to get a sense of when the next shoe is about to drop. Here is what it says on that topic.
Moody's has just placed $27 billion of AAA-rated bonds backed by Greek loans on review for possible downgrade due to increasing stress in the domestic economy. In essence thiscovers all Greek structured finance and covered bond transactions. Which is odd because Papandreou for the 1,485,384,495.4th time has just said that Greece is not looking for bailouts. Just this once, we will take Moody's word over someone else's.
The presentation below from Ann Rutledge is recommended almost exclusively for credit and structured finance fanatics. It does a very good job of capturing the morphing face of credit products and the (un)packaging of risk, especially over the past two decades.