NEWS IN ENGLISH – Central Bank says downgrading by Moody’s is not indication of problems with health of Brazilian banks

allen — Fri, 29 Jun 2012 13:34:08 +0000

Kelly Oliveira and Daniel Lima Reporters Agência Brasil

Brasília – The director of Economic Policy at the Central Bank, Carlos Hamilton Araujo, says that the lowering of the risk classification of eight Brazilian banks by Moody’s Investor Service, announced on June 27, was not a sign that there were problems in Brazilian financial institutions.

Araujo noted that the adjustment was a generalized procedure to make the risk rating of banks adequately reflect their relationship to sovereign ratings (that is, the risk rating of the governments of the countries the banks operate in and the bonds of those governments).

“The Moody’s report does not raise any concerns about the health of Brazilian banks,” declared Araujo.

Allen Bennett – translator/editor The News in English

Link - Rebaixamento de notas pela Moody's não indica preocupação com saúde de bancos, diz diretor do BC

NEWS IN ENGLISH – Moody’s downgrades eight Brazilian banks

allen — Fri, 29 Jun 2012 13:26:07 +0000

Daniel Lima Reporter Agência Brasil

Brasília – Moody’s Investor Service downgraded eight Brazilian banks on June 27 in what is described as a technical adjustment following a classification revision that began in February. According to Moody’s a new classification was necessary because the institutions had a higher rating than the Brazilian government. The banks affected are Banco do Brasil, Safra, Santander, HSBC, Bradesco, Itaú, Itaú BBA and Votorantim. The reasoning is that as the banks all have Brazilian government debt bonds (“Dívida Pública Federal”) in their portfolios, their exposure to risk had to be altered.

“Our analysis indicates that there is little or no reason to believe that these banks will be insulated from a government debt crisis,” says the report from Moody”s.

A similar revision has occurred in other countries where banks had better ratings than their governments.

Allen Bennett – translator/editor The News in English

Link - Agência de classificação de risco reduz nota de oito banco brasileiros