IS RATING COMPANY'S DOING THIER JOB,,,,,,,,,???

MOODY’S CUTS FRENCH BANKS’ RATINGS

Moody’s Investors Service cut the credit ratings of France’s Credit Agricole SA and Societe Generale today, citing their exposure to Greece’s debt, a fresh blow to euro area leaders struggling to restore confidence in the region. The ratings agency left BNP Paribas on review for a ratings downgrade saying the bank’s profitability and capital base provides adequate cushion to support its Greek, Portuguese and Irish exposure. In a sign of the international alarm over the crisis, China and the United States urged Europe’s leaders to prevent the euro area debt mess  now threatening Italy from spreading. US President Barack Obama urged “more effective coordinated fiscal policy” by the euro area states. Chinese Premier Wen Jiabao said Beijing was willing to help its biggest trading partner, but added that Europe must stop the crisis from growing. Investors are increasingly sceptical the debt debacle in the 17-nation currency area can be resolved. Credit markets are factoring in a 90 per cent chance Greece will default on its debts and they demanded the highest risk premium on Italian five-year bonds at auction yesterday since the country joined the euro in 1999. “What we have to take note of now is to prevent the sovereign debt crises from spreading and expanding further,” Wen said today. Trying to contain the crisis, Italy is expected to approve a ¤54-billion ($73-billion) austerity package today, although news of the measures has so far done little to reverse investor alarm over whether the euro area’s third-biggest economy can manage its debts. Prime Minister Silvio Berlusconi’s government has tabled a confidence motion which would force it to resign if it lost. An initial vote is scheduled for around 1200 GMT ahead of final approval of the austerity package around 1800 GMT. Greek Prime Minister George Papandreou will hold aconference call today with French President Nicolas Sarkozy and German Chancellor Angela Merkel. The call is scheduled for 1600 GMT, Papandreou’s office said. A rebound in stock prices and the euro stalled in Asia today as investors remained spooked about the crisis. German government bonds opened higher. In an attempt to restore confidence, both BNP Paribas and Societe Generale have announced plans to sell riskweighted assets to help ease investor fears about funding challenges. BNP said today it would sell ¤70 billion ($95.7 billion) of assets and reduce US dollar funding needs by $60 billion by the end of 2012.