KNOWLEDGE CENTER

Knowledge Center Archive

Jan
30
2012

Fitch Downgrades Several European Governments

By SEI Investment Management Unit

On Friday, January 27, Fitch downgraded the credit ratings of several European governments, including Italy and Spain. SEI’s Funds have little or no direct exposure to the affected securities, and as with Standard & Poor’s more far-reaching eurozone downgrades on January 13, we expect the actual market impact to be minimal. However, further downgrades, especially of Italian government debt, could have significant implications for benchmark indices and the investment managers who track them. SEI will continue to closely monitor further developments in Europe.

Fitch’s actions were much narrower in scope than S&P’s, and it is notable that France was not included in the report. Fitch remarked favorably on efforts by national governments of the eurozone to address fiscal and trade imbalances, and observed that recent policy measures by the European Central Bank (ECB) support that process. However, barring a more durable solution to the crisis, we continue to believe that additional downgrades are likely.

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Fitch Downgrades Several European Governments

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