Last week the Canadian rating agency DBRS cut Italy's sovereign credit rating to BBB (high) from A (low), a move that could raise borrowing costs for struggling Italian banks. As David Pollard reports, the number of countries at risk of having their credit ratings cut has never been higher.
Nervous times, nervous markets. A new US president could throw a spanner in the global economic works ... And that's just this month. Later, nation after sovereign nation could see credit downgrades - ratings outlooks never worse. Roughly a quarter of countries the big agencies cover are at risk. S&P's negative outlooks now outnumber positives by 4 to 1 - for Fitch, 6 to 1. The triple A club is shrinking. Investment grade BBB- or above with S&P is at an all-time low. A myriad of reasons given by analysts - though most mention: debt. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "At the end of 2016, world debt hit 325 per cent of GDP. A new record, helped in no small measure by the United States. But this seems to be an issue that is absolutely not going away." Latin America has the most negative outlooks. And South Africa is seen as a key candidate for losing its investment grade. Europe starts this year with more positive ratings than negative for the first time in a decade. But elections across the continent put political risk centre stage. Just when the vote at the ECB appears to be swinging against ultra-loose monetary policy. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Mario Draghi is going to have to stand up at his press conference in Frankfurt and say 'We are going to have to taper QE further' ....This time next year, QE will be an exclamation mark in financial market history." If for now, markets wait for other history in the making. The inauguration of Donald Trump potentially unleashing a whole new set of worries over world trade and security.