The bad news in Greece keeps coming, with a fresh wave of downgrades hitting the country’s sovereign credit rating as well as those of its largest banks. Little solace can be found in the EIU’s latest financial services report for Greece (link for subscribers; link to online store for non-subscribers).

Our latest forecasts for the Greek financial sector feature both a contraction in credit and a flight of deposits in the coming years. Banks’ significant holdings of government debt also risk significant write-downs when, as the EIU expects, Greece will need to restructure its debt in 2012, before it returns to the markets to refinance its formidable borrowing requirements in 2013.