Morning business round-up: Italy's credit rating cut


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Italy has had the rating of its creditworthiness cut, the latest move in the European debt crisis.

Standard and Poor's cut its rating by one level to A from A+, and said the outlook remained negative.

The agency said weak growth may limit Rome's ability to cut state spending and bring its finances in order.

Markets shrugged off the decision, while Italian Prime Minister Silvio Berlusconi said the move was influenced by "political considerations".

In other eurozone developments, Greece says it has held "productive and substantive" talks with its debt inspectors aimed at deciding if Athens should get more bailout money.

Discussions between Greece, the International Monetary Fund and European authorities will resume later on Tuesday. No further details of Monday's three-hours talks were made public.

The crisis has prompted German industrial firm Siemens to withdraw 500m euros (£436m) from a French bank and put it in the European Central Bank, according to reports.

According to the Financial Times, it withdrew the cash over concerns about the unnamed bank's stability.

It was also reportedly drawn to the higher rate of interest at the ECB.

UBS, the Swiss bank caught up in a $2.3bn (£1.5bn) rogue trading scandal, will be holding a board meeting in Singapore this week.

The board is likely to review the bank's processes that failed to prevent the loss amid increasing pressure from investors and regulators.

Media caption,
Biz Heads

In the UK, mortgage lending rose by 6% month-on-month in August to £13.4bn, the highest monthly total since July 2009, the Council of Mortgage Lenders said.

Lenders have been relatively careful about the people they lend to since the financial crisis, but fears over the economic climate and fears for jobs have also led to a wait-and-see approach from many potential house buyers.

The latest edition of Business Daily from the BBC World Service asks whether, if Greece defaults on its debts, it can do so in an orderly way with minimal damage. Presenter Lesley Curwen speaks to Paul Blustein, from the Centre for International Governance Innovation, and to Mario Blejer, former central bank governor of Argentina.

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