Blocking Bezalel Smotrich's car at the entrance to Channel 14/according to Section 27 A of the Copyright Law
After downgrading Israel's credit rating for the first time ever, the rating company Moody's also downgraded the rating of the five largest banks.
The rating of the major banks - Hapoalim, Leumi, Mizrahi Tefahot, Discount and International - dropped one grade from A2 to A3 and they were assigned a negative outlook, similar to the state's.
The downgrade of the banks is not surprising and was expected after the downgrade of the state.
Moody's explains in its reasoning that the downgrade is related to the fear of the state's ability to support banks in a time of need, for the same reasons for which the state's rating was lowered.
Despite this, Moody's believes that there is a high chance that in times of need the government will support the bank groups due to their high importance and long-standing practice.
However, in the event of an escalation, there is a fear that "the damage to the banks will be more severe than we see today," according to Moody's, and the rating company also notes the increase in security and social risks which may also harm the banks." The company also notes the banks' investments in Real "N, an area that was hit hard by the war.
Moody's.
A decrease in the state's ability to support banks in times of need/ShutterStock, Dariusz Gryczka
As a reminder, Israel's credit rating dropped for the first time last Friday.
Moody's company, the first to publish the rating among the three companies involved in this, lowered Israel's rating to level A2 as well as the rating forecast to negative.
In the company's decision, it was stated that one of the main reasons for the downgrade is the assessment that the exposure of the State of Israel to political risks could, with a high probability, continue in the foreseeable future, even if there is a decrease in the intensity or a stop of the fighting in Gaza.
The company notes that although negotiations are currently underway for the release of the abductees in exchange for a temporary ceasefire and the introduction of additional humanitarian aid to Gaza, there is no clarity regarding the prospect, duration and ability to implement such an agreement.
The company further states that the fact that the US government and the countries of the region have presented general outlines of a long-term plan that includes the establishment of a new governance framework and political leadership in Gaza, may contribute to improving Israel's security. However, the Israeli government has so far rejected such plans. Moreover, If such a plan is ultimately concluded, its continued success over time, in the company's opinion, will be questionable.
Therefore, the company estimates that the geopolitical risks, and in particular the security risk, will remain substantially high for Israel in the medium and long term. Also, the State of Israel may face A period of increased internal political upheaval as the War Cabinet is dissolved.
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