CREDIT BLOW TO UK BANKS; Move could increase mortgages & loans.
BORROWERS could face higher charges after the credit rating of some British banks was downgraded last night.
Top ratings agency Moody's hit some of our biggest lenders, including Barclays, Royal Bank of Scotland and HSBC.
In the US, Bank of America, Citigroup, Goldman Sachs and JP Morgan are among those downgraded. In total 15 banks and financial institutions worldwide were downgraded.
This threatens to add billions of pounds to banks' costs as it makes it more expen-sive for them to raise funds. That could lead to higher borrowing costs for businesses and homebuyers. A downgrade has been expected because of their outstanding loans to countries caught up in the eurozone crisis.
As well as assessing the risk of the banks not getting all the money back, Moody's would have also factored in the ability of the Government to step in and bail-out the banks if they were to get into trouble.
However, there is no certainty that costs will increase as sources say money markets have factored in the longawaited downgrade already.
Ratings agencies have come in for flack in the past after failing to forecast the financial crisis which erupted in 2008. One banking insider branded them "as much use as a wet paper bag".
The British Bankers Association said our banks were well capitalised so able to withstand future financial difficulties and have plans in place which will prevent taxpayers having to step in."
DOWNGRADED J HSBC and Barclays HQ
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|Publication:||The Mirror (London, England)|
|Date:||Jun 22, 2012|
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