Spain is underestimating potential losses by its banks, ignoring the cost of souring residential mortgages, as it seeks to avoid an international rescue like the one Ireland needed to shore up its financial system.
Stocks rose, sending the Dow Jones Industrial Average to the highest since July, while commodities and the euro climbed as reports bolstered optimism in the U.S. and German economies and Spain’s borrowing costs decreased.
Denmark, home to the world’s biggest household debt burden, won’t lose its top credit rating any time soon as stable public finances and a current account surplus offset the risks, Fitch Ratings and Standard & Poor’s said.
Turkey’s central bank faces challenges in ensuring growth and inflows of foreign capital don’t threaten macroeconomic stability, and the bank’s success will feed into the country’s debt rating assessment, Fitch Ratings said.
Russia’s economy is unlikely to grow faster than 4 percent annually in the coming years “in the absence of major structural reforms,” Edward Parker, head of emerging europe sovereigns at Fitch Ratings said in Moscow today. Fitch predicts gross domestic product will grow 4.3 percent this year, then 4 percent in 2011 and 2012, he said.