August 17, 2007 / 4:55 PM / 13 years ago

UPDATE 1-Widespread bank rating changes not expected-Moody's

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NEW YORK, Aug 17 (Reuters) - Moody’s Investors Service on Friday said widespread rating downgrades are not expected for the world’s banks as a result of the current market turmoil.

Third-quarter earnings will likely decline for a number of banks, however, and a handful of banks may be downgraded, Moody’s said in a report.

“We are unlikely to change bank ratings because of temporary liquidity problems,” said David Fanger, a managing director at Moody’s.

Moody’s also said exposure to large banks in Europe and Asia are manageable, but the financial impact for a select number of smaller and less diversified banks could be more significant.

A number of central banks have provided liquidity to the market over the past week, including the U.S. Federal Reserve and the European Central Bank.

The Fed on Friday cut the discount rate in a surprise move aimed at keeping credit flowing and calming jittery global markets. For details, click on [ID:nN17415568]

Additional reporting by Walden Siew

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