British banks to be downgraded by credit ratings agency Moody’s as euro-crisis spreads

Posted by The Extinction Protocol: 2012 and beyond

June 21, 2012 – LONDON – British banks are set to be downgraded by a leading credit ratings agency, it was claimed today. Royal Bank of Scotland, Lloyds Banking Group and Barclays are all in line for a downgrade by ratings agency Moody’s over fears the eurozone crisis threatens their stability. In a move that would cost financial institutions billions of pounds and could have a knock-on effect on the cost of credit to business and consumers, Moody’s is set to push some banks down two notches, sources said. Moody’s will also downgrade a number of the biggest banks around the world, it was claimed, a decision that would show how the eurozone sovereign debt crisis is hitting all areas of global finance. The cuts are part of a wider review by Moody’s of the global banking sector that Sky News said is likely to be unveiled tonight after the US market closes. The downgrades, which are expected to range in scope from one notch to three notches, will follow joint efforts by the Bank of England and Treasury to boost cash flows in Britain’s banks through a multibillion pound cheap loan scheme. The banking industry has been hit by higher funding costs as the eurozone troubles escalated and has been hoarding money for fear of another worrying phase in the crisis. The Bank held its first auction under the new scheme yesterday, offering£5 billion in cheap loans with a rate of 0.75 per cent, which was entirely taken up by the country’s lenders. Moody’s has said it will release the ratings reviews, which include significant downgrades for many banks, by the end of June. A spokeswoman for Moody’s declined to comment on the exact timing. There has been speculation the downgrades were imminent for several days. –Daily Mail