Moody's Cuts Debt Ratings of 28 Spanish Banks

Moody's Investor Service is cutting its credit ratings on 28 Spanish banks by one to four notches, saying the weakening finances of Spain's government is making it more difficult for that country to support its lenders. Moody's also said the banks are vulnerable to losses from Spain's busted real estate bubble. The announcement from Moody's came on the same day that Spain's government formally asked for help from its European neighbors in cleaning up its stricken banking sector.

However the request left many questions unanswered, including how much of a $125 billion loan package Spain would ask for. That uncertainty led to losses today in stock markets in the Europe and the US. Bond investors pushed Spain's borrowing costs higher, a signs of lagging confidence in the country's ability to support its banks.