Ratings of 19 UK banks may be cut: Moody's
08 Apr 2011
According to Moody's, ratings of 19 UK banks may be cut to reflect the lower chance of a future government bail-out.
The rating agency added the change are likely to affect smaller lenders, starting with building societies.
The big four banks, seen to be the most important to the system due to their size, would be assessed only in the second half of the year.
Currently the banks are enjoying upto five notches higher ratings, than they would otherwise thanks to ''systemic support''.
The ratings agency said the reassessment could trigger negative outlooks, reviews for a possible downgrade, or downgrades for some ratings and would be taken into consideration on Moody's expectations on how the relevant banks' stand-alone credit strength would develop.
Any downgrade is likely to increase the of borrowing costs for banks as many investors are restricted from lending to borrowers with lower ratings.
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