On Wednesday, the cabinet passed draft legislation in effect canceling certain of the Hypo's debts to some of its creditors.
S&P said this special law was unique and had never been seen before in Europe. Thomas Fischinger of S&P Frankfurt complained on Austrian national Ö1 radio on Thursday that the cabinet regulation was a sign that there was too little support for the banks from the Austrian government.
S&P raised the possibility of lowering its credit-worthiness ratings of several Austrian institutions. Fischinger said a decision would be taken in July, after the parliament decided on the Hypo regulation. S&P is threatening to lower the rates in Lower Austria, Styria and Burgenland provinces as well as in Vienna.