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    October 07, 2011

Moody's Downgrades 12 British Banks

   VOA News

   Moody's Investors Service has downgraded the credit ratings of 12
   British banks over concerns that the government will not provide
   adequate support to the institutions if they become financially
   troubled.
   The credit rating firm said Friday that the downgrades were caused by a
   "reassessment of the support environment in the U.K." It said recent
   government moves have "significantly reduced the predictability of
   support" for the financial firms over the "medium to long-term."
   The affected firms include the government-controlled Royal Bank of
   Scotland, which had its rating slashed by two levels. The debt rating
   of Lloyd's TBS Bank was reduced by one level.
   Moody's says the British government is likely "to allow smaller
   institutions to fail." But said it does not believe there has been a
   deterioration in the financial strength of the banking system or the
   British government, saying the government is likely to continue to
   provide "some level of support to systemetically important financial
   institutions."

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