French bank ratings downgraded by Moody's

Signs of three French banks on street in Rennes Two of the top three banks in France had their ratings cut
Credit rating agency Moody's has downgraded two French banks due to their exposure to Greek debt.
Credit Agricole was cut from Aa1 to Aa2 and Societe Generale from Aa2 to Aa3.
A third bank, BNP Paribas, was kept on review for a possible downgrade.
German Chancellor Angela Merkel and French President Nicolas Sarkozy are due to hold talks on Wednesday with Greek Prime Minister George Panandreou in response to growing market fears of an imminent debt default by Greece.
The two downgraded banks have seen their share prices fall 60% and 65% respectively since February, while BNP has fallen 53% over the same period.
'Small downgrade' All three banks' ratings have been on review since 15 June, and Moody's decision had been widely anticipated by the markets.
Moody's said all three banks were strong enough to absorb the losses emanating from any Greek debt default.
French central bank head Christian Noyer welcomed the downgrade decision as "relatively good news".
"French banks have an excellent rating, the same level as other major European banks - HSBC, Barclays, Deutsche Bank, Credit Suisse," he said.
"It's a very small downgrade, and Moody's had a higher rating than the other agencies so it's just put them on the same level or slightly better than the others."
However, the downgrade is likely to put further pressure on the banks, as many investors limit how much they are willing to lend to them or invest in their shares based on their credit ratings.
Moody's focused on the banks' exposure to the Greek economy, although the recent market sell-off reflects a broader concern over the health of other southern European countries such as Italy, as well as over the political will to sustain the euro.
SocGen has a total exposure to Greek government and commercial debts equal to 6.6bn euros, while Credit Agricole has 27bn euros, according to their disclosures to the European Banking Authority.
For BNP Paribas the total is 8.5bn euros.
Moody's said BNP's rating could also be cut one notch, although it noted that the bank's capital and accumulated profits should be enough to absorb losses from Greece, as well as from the troubled Portuguese and Irish economies.

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