Tuesday, May 24, 2011

Moody's Reviews UK banks for Possible Downgrade

Fourteen UK banks and building societies have been told that their credit ratings may be cut because of the withdrawal of government support. Moody's said on Tuesday it was reviewing banks including Lloyds and Royal Bank of Scotland, hitting the share prices of both firms.

Moody's sees less government support as possibly weakening the creditworthiness of some financial institutions.

A downgrade would raise borrowing costs for banks and building societies.

The Bank of England has already said that an emergency funding line - the Special Liquidity Scheme - will not be rolled over when it expires in January 2012.


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