Moody's international credit rating agency on Wednesday downgraded
Israel's banking system outlook to negative from stable. The agency took
the step in response to the "projected slowdown in economic growth and
the country's challenging operating environment which will continue over
the 12-18 month outlook period."
The Bank of Israel responded to the downgrade, saying that it was
studying the report and will seek to draw from it the appropriate
conclusions.
In its report, entitled "Banking System Outlook: Israel," the agency
predicted that GDP growth would decelerate significantly in 2012, mainly
due to weakening export demand stemming from the unresolved eurozone
crisis.
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