The Royal Bank of the Canada loses triple-A rating

The Royal Bank of the Canada been decommissioned from Aaa to Aa1 Monday by Moody, who warned that investors were becoming exposed to greater risks of continuous expansion of the Bank of its investment banking operations.

Moody action comes after two years of growth at RBC markets equity, investment banking arm the Bank committed hundreds of staff since the beginning of the financial crisis.

In its report, Moody has warned that growth unit presentations the holders of the Bank to "increased earnings volatility and laying risk significant management challenges.

"Are attracted by the shareholders and managers of the Bank the potential for growth of businesses in the financial markets, but these companies can expose the holders of Bank to tail hidden risks, said Peter Nerby, senior analyst of Moody."

Warnings of Moody echo concerns increased investor since the financial crisis on the risks taken by the divisions of investment banks to reach the highest returns that make it more attractive for banks.

Royal Bank of Scotland was forced to seek support from the Government in large part due to losses incurred by its investment banking arm.


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