Christine Lagarde, Managing Director of the International Monetary Fund, said that the world would face a Great Depression similar to that in the 1930s unless states settle their differences and start working together to cope with the debt crisis, Gazeta.ru reports.
There are no states secure from recession, it cannot be resolved by a group of states, she says.
Fitch Ratings reduced ratings of international financial institutions, including the Bank of America and Goldman Sachs. Their rating dropped from A+ to A. Other major banks, such as Barclays (UK), BNP Paribas (France), Deutsche Bank (Germany) and Credit Suisse (Switzerland), had reduction of ratings. BNP Paribas and Deutsche Bank had their rating altered from AA- to A+, Barclays and Credit Suisse – from AA- to A.
Leaders of euro zone states decided last week to launch two stabilization funds in mid-2012, the EFSF with 780 billion euro of assets and ESM with 500 billion. The EFSF was established in mid-2010 to support stability of the euro zone by providing aid. It is a temporary mechanism and will be shut down on June 30, 2013, when all loans are paid off.
Moody’s lowered the rating of 3 French banks last week: Credit Agricole, BNP Paribas, Societe Generale. EU leaders are searching for funds and foreign investors. Many BRIKS bank, including China refused. The UK announced once again that it does not want to provide finances to other states to problem states.
