Unlike the downgrade of the U.S., a rating cut for EU sovereigns might actually mean something...

|By:, SA News Editor

Unlike the downgrade of the U.S., a rating cut for EU sovereigns might actually mean something as European banks are far larger (assets as a % of GDP) and far more intertwined with governments than their American cousins, points out Mark Grant. Lower sovereign ratings are then almost certain to increase already high bank funding costs.