Chicago - AFP
Spanish Prime Minister Mariano Rajoy said he did not believe that Spain's banks would need rescuing by Europe. "I don't think so," Rajoy told journalists on Saturday after arriving in Chicago to take part in a two-day NATO summit, expressing surprise after French President Francois Hollande said he was favorable to a European mechanism to support the recapitalization of Spanish banks. "I don't really know if Mr. Hollande said that, because if he said it must be because Mr. Hollande has information that we don't have," he added. Hollande said Friday that it would be "desirable" for there to be a recapitalization of the Spanish banks. Moody's on Thursday cut the debt ratings of 16 Spanish banks by one to three notches, citing the effects of the ongoing recession and the Spanish government's own reduced creditworthiness. The leading bank, Santander, and the number two, BBVA, were both hit with three-notch downgrades from Aa3 previously to A3, which for Moody's is an upper-medium credit grade, with still low credit risk. Two other large banks, Banesto and CaixaBank, were also cut to A3.