Moody’s warns UK banks of potential downgrades
Tuesday, May 24, 2011
LONDON (AP) — Ratings agency Moody’s Investors Service has put 14 British banks on review for potential credit rating downgrades, citing the lack of any state-sponsored bailouts in the future.
The list of banks released by Moody’s on Tuesday includes the Royal Bank of Scotland and Lloyds Banking Group, both of which were bailed out by the government at the height of the global credit squeeze in 2008.
Moody’s says the review “has been initiated in response to ongoing guidance from the U.K. authorities that banks that fail in the future should not expect capital injections from the public purse.”
The ratings agency says the review, which could lead to a rise in the banks’ borrowing costs, will take around three months.
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