By IANS,
Madrid: International credit ratings agency Moody’s has said it would keep a “negative” outlook on the Spanish banking industry.
The agency said the banks “will continue to operate in a recessionary environment” and predicted that assets in the Spanish banking system will continue to deteriorate for the following 12 to 18 months because of the fall in property prices and high unemployment.
The banks’ reliance on funding from the European Central Bank (ECB), their exposure to Spain’s sovereign debt and the restricted access to funding markets also contributed to the agency’s pessimism, Moody’s said Friday.
The European Commission and Moody’s predicted Spain’s GDP will shrink by 1.4 percent in 2013 while both Bank of Spain and International Monetary Fund (IMF) forecast a fall of 1.5 percent.