UPDATE 2-DBRS shuts Europe units, cuts jobs in N.America
(Adds job cuts in North America)
BERLIN/LONDON Jan 8 (Reuters) - Canadian ratings agency DBRS has closed its European offices and cut an unspecified number of jobs in its New York and Toronto units due to the effects of the global credit crunch, a spokeswoman said on Tuesday.
The closures, which happened on Tuesday, affect 43 employees at branches in Frankfurt, Paris and London.
The DBRS spokeswoman declined to specify how many jobs were cut in North America but said DBRS would now have about 200 employees worldwide compared with around 270 before.
Coverage of European credit would continue from North America as it did before the European offices opened in 2005, the spokeswoman said.
The jobs shed in North America were mostly back office positions and support staff for DBRS's European operations. Some front office jobs were also cut, she said.
DBRS had been focusing its efforts in Europe on offering research and ratings on banks and securitisation.
While bank ratings are likely to be even more in demand due to the focus on credit quality, securitisation issuance and hence the demand for ratings has plummeted.
"When market conditions improve we will be looking into reopening our European offices," the spokeswoman said.
DBRS made waves last year when it criticized the triple-A ratings assigned by Moody's Investors Service and Standard & Poor's to complex and innovative debt products known as constant proportion debt obligations, or CPDOs.
Some of these deals have since run into severe problems.
In Canada, DBRS has been criticized for the top ratings it gave to asset-backed commercial paper issued by groups other than the country's big banks.
DBRS was the only rating agency to rate paper in the so-called third-party ABCP market. The sector seized up in August when banks refused to give emergency funding to the paper when buyers fled on fears it was exposed to U.S. subprime mortgages.
Moody's Corp (MCO.N), parent of Moody's Investors Service, said on Monday it would eliminate 275 jobs, or 7.5 percent of its staff, due to lower demand for ratings on securities.
Ratings agencies have attracted a barrage of criticism in recent months as the credit crisis has deepened, leading to calls from politicians for greater regulation of the industry.
(Reporting by Madeline Chambers in Berlin, Richard Barley in London and Nicole Mordant in Vancouver; Editing by Rob Wilson)
((madeline.chambers@reuters.com; +49 30 2888 5230; Reuters Messaging: ann.chambers.reuters.net@reuters.com)) Keywords: DBRS EUROPE/
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