After downgrading France and a number of other eurozone countries Friday, then cutting its rating on the European Financial Stability Facility Monday, Standard & Poor’s is out with a note Tuesday detailing the potential fallout to other European issuers from its recent actions.

The ratings agency said that its recent actions – which included cutting the AAA ratings of France and Austria as well as ratings on Italy, Spain and others – could lead to related moves on other issuers over the next four weeks. (See “S&P Cuts French AAA, Says Europe Still Missing The Point.”)

The group likely to draw the lion’s share of attention is the European banking system. In December, S&P said it was reviewing ratings on 85 different eurozone bank groups for possible downgrades. “This reflects the interconnected risks we see between the sovereigns and the European banking system,” the ratings agency says, noting that governments can impact the creditworthiness of banks. For proof, just look at recent years, which have “seen governments support banks with fresh capital, more liquidity, asset insurance and guarantees.”

It stands to reason that countries with impaired credit ratings have less capacity to provide such support to their banks, but the European Central Bank has shown a willingness to serve as lender-of-last-resort to Europe’s banks, a mantle it has refused to take on for the eurozone’s government borrowers.

Offering billions in low interest rate loans for three years has allowed the ECB to temporarily remove liquidity concerns for the region’s banks, but those same banks appear to be merely parking those funds back with the central bank, rather than pumping capital back into the economy in a bid to increase growth, which is the only true driver to bring Europe out of its morass.

85 banks,... I hope they are paying those guys at S&P overtime for this,... maybe even a nice fat bonus check.