Fears of banking turmoil in eastern Europe on Tuesday triggered warnings that European financial institutions exposed to the region could provoke a stampede into the dollar and US bonds. The turmoil was prompted by a report from Moody’s (see separate report) which warned that west European banks with east European subsidiaries were at risk of downgrades. S&P later issued a similar caution. The euro fell 1.5% to a two-month low against the dollar, and dropped sharply against the pound and the yen, while the Polish zloty hit a five-year low against the euro.

This entry was posted by Gwen Robinson on Wednesday, February 18th, 2009 at 5:39 and is filed under Capital markets. Tagged with Moodys. Edit this entry.