IT’S A SURE sign of a disjointed market when investors welcome news of a sovereign downgrade. But that’s exactly what happened when, as 2009 drew to a close, Moody’s Investors Service cut its rating for Greece by just one notch, from A1 to A2. In previous weeks, both Fitch and Standard & Poor’s had placed Greece at the triple-B level. Moody’s maintenance of that one single-A rating meant that Greek government bonds would still be acceptable as collateral at the European Central Bank – crucial for the country’s banks as they coped with liquidity concerns and a fast-deteriorating economy.
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