Fitch downgrades UBS; puts EU, US banks on watch

Fitch ratings agency downgraded Swiss bank UBS on Thursday while putting 12 other major European and US banks on negative ratings watches, amid worries over fragile global growth. While UBS was dropped one notch on the basis that Fitch no longer believes the Swiss government is an absolute guarantor of its stability, the other banks were cited for heavy reliance on short-term funding and volatile earnings in a period of great market stress.
"The placement on Rating Watch Negative... reflects Fitch's view that these institutions' business models are particularly sensitive to the increased challenges the financial markets are facing," Fitch said in a statement. Among the 12 banks were BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and Societe Generale. Earlier Thursday Fitch downgraded two British banks as well, citing the reduced likelihood of further government support.