International rating agency Moody’s has lowered its credit rating for three Greek financial institutions, announced the company Thursday. The unstable Greek economy, payment problems by the government and the fear of the population to bankruptcy of the country are main reasons to lower the credit rating.
The banks that were downgraded are Piraeus Bank, National Bank of Greece and Alpha Bank. The reduction is partly the result of the continued deterioration of financing and the poor liquidity of the banks. During recent months numerous bank customers withdrew substantial amounts from their accounts, and made deposits in other countries.
Although the European Union has a “plan B” to save Greece from abrupt bankruptcy, it is unclear to what extent the Greek banks can be saved.
Greek banks like Piraeus Bank, National Bank of Greece, Eurobank and Alpha Bank have substance and presence in Cyprus. A large number of FBME customers made a decision to open a new bank account with one of these Greek banks to recover their assets on the FBME bank account. With Greece being at risk, having a bank account at one of the Greek banks can have major consequences.