Oct. 10 (Bloomberg) -- Italy’s credit downgrade by Fitch Ratings means the bonds will no longer be eligible for inclusion in the liquidity asset buffer required by the U.K. Financial Services Authority, JPMorgan Chase & Co. said.
“The FSA requires from certain firms, including branches of foreign banks, to hold a liquidity buffer of high-quality, unencumbered assets with credit rating of AA or above,” Nikolaos Panigirtzoglou, a global-markets strategist in London, wrote in an investor report on Oct. 7. “Belgium is the obvious beneficiary, as it is the next cheapest paper that can be used for the FSA’s liquidity buffer. The impact should be limited, as bank treasuries have been largely anticipating this downgrade.”
Fitch cut Italy’s credit rating to A+ from AA- on Oct. 7. The nation is graded A2 with Moody’s Investors Service and A with Standard & Poor’s.
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