On Oct. 15, 2008, Standard&Poor's Ratings Services placed its 'BBB+/A-2' sovereign credit rating on the Republic of Hungary on CreditWatch with negative implications. In conjunction with this rating action, Standard&Poor's also placed its 'BBB+/A-2' issuer credit rating on the City of Budapest on CreditWatch negative. The CreditWatch placement reflects our concerns over mounting financial-sector funding pressures and their potential to raise general government debt materially from its current level of 67% of GDP. Domestic and foreign-owned banks are facing sharply higher financing costs and reduced access to international markets. These institutions' weakened funding profile stems not only from the current turmoil in credit markets throughout the industrialized world but also from domestic issues. Domestic credit in
