wah....27 C today...very surprisingly warm
and thurs expects 28C... not bad at all for an autumn
kennynah wrote:wah....27 C today...very surprisingly warm
and thurs expects 28C... not bad at all for an autumn
THE FRAGILE UK banking sector was further knocked today by a downgrade by Moody’s, the credit rating agency.
Moody’s has decided to reduce the ratings of 12 UK banks and building societies by up to three notches, to reflect the removal of implicit government support in the event of possible failure.
The news sent bank shares lower, with RBS 3.8 per cent off and Lloyds 3.4 per cent down.
The rating actions include a one-notch downgrade of Lloyds Group (to A1 from Aa3), Santander UK plc (to A1 from Aa3), Co-Operative Bank plc (to A3 from A2), a two-notch downgrade of RBS (to A2 from Aa3) and Nationwide Building Society (to A2 from Aa3); and downgrades of one to five notches of seven smaller building societies.
The ratings of Clydesdale Bank were confirmed at A2 (negative outlook).
The more severe downgrades than expected for smaller lenders means that the ratings of around four of the UK’s building societies will now be down to junk status. That could leave them facing higher borrowing costs at a time when trading conditions are already difficult.
Some of the firms have been given a notch upwards because of a reassessment of their own risk and liquidity profile. This means that those institutions will only suffer a two-notch downgrade, in line with market expectations.
The news will be a further blow to the sector, with fears growing that government-backed RBS might need another recapitalisation.
"Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions, which continue to incorporate up to three notches of uplift," it said in a statement.
"However, it is more likely now to allow smaller institutions to fail if they become financially troubled. The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government," the agency added.
Chancellor George Osborne told the BBC: "People ask me 'how are you going to avoid Britain and the British taxpayer bailing out banks in the future?'
"This government is taking steps to do that, and therefore credit rating agencies and others will say 'well, actually these banks have got to show that they can pay their way in the world.
"And I am confident that British banks are well capitalised, they are liquid, they aren't experiencing the kind of problems that some of the banks in the euro zone are experiencing at the moment."
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