Moody's to downgrade 21 Spanish banks

Moody's is set to 'significantly' downgrade 21 Spanish banks within a week, following a cut of credit ratings on Italian banks, the Spanish economic daily Expansion said on Wednesday. "Sources in the Spanish financial sector are convinced that the agency will lower in a significant manner the ratings of numerous institutions," said the daily. "The announcement can come within a week according to market sources," it said, adding that 21 banks would be affected. The downgrade would deal a further blow to battered Spanish banks, which find it hard to borrow money from other banks because many in Spain are heavily exposed to a real-estate sector that has been in a slump since 2008. In April, Spanish banks borrowed a record 263.5 billion euros ($339 billion) from the European Central Bank, the lender of last resort to Eurozone commercial banks. On Monday, Moody's slashed its credit ratings by up to four notches for 26 Italian banks, citing their vulnerability to Italy's recession and further trouble in the 17-nation Eurozone.