Business Week (08/21/08)
A recent report from Standard & Poor's Ratings Services reveals that although cash infusions from the government have helped the financial sector begin to recover from the credit crunch, the path to full recovery will be long. S&P's outlook for banking groups has soured for the rest of the quarter with 22 of 50 top banks garnering a negative outlook at the end of June. The market is currently in the second phase of deterioration in which loan books worsen, impacting not only those firms in the capital markets, but also those with traditional banking services. It is unclear how much capital raising banks will be able to do given the current climate, and recovery for the financial sector is not expected until the latter part of 2009 or the start of 2010. S&P warns that movement in housing, retail and commercial mortgage banking are the greatest concerns of ratings agencies, as are structured products that continue to weigh heavily on debt trading.
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