A University of Louisville finance professor predicts that Cleveland-based National City Bank may be next for review if Congress doesn’t act quickly on a bailout bill. Professor David Dubofsky says the market doesn’t seem to have much confidence in National City.
“If you look at the yields on the bonds that have been issued by National City, they’re very, very high,” says Dubofsky, “well over 20-percent to even 30-percent. That’s saying the market does not think National City will survive.”
Moody’s Investor Service announced this week it might downgrade National City’s rating, but bank spokesperson Kristin Baird Adams says the company is strong.
“Announcing a possible downgrade is not, in and of itself, a downgrade,” says Adams, “and I would reiterate that National City’s debt ratings remain solid in the investment grade today.”
Bank deposits up to 100-thousand dollars are insured by the Federal Deposit Insurance Corporation.