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Credit rating agency Fitch downgrades credit rating for Lloyds TSB and Royal Bank of Scotland.If the high ups in Royal Bank of Scotland did not like their credit rating being slashed by credit rating agency Moody; today they have more reasons to be upset; the downgrade by Moody is followed by Fitch.Fitch believes and has openly said if UK banks get themselves in trouble they will not be supported by the UK government. Apparently the high street banks do not have their high stake investment banking separate from the retail banking. Independent Commission on banking wants this changed and want the banks to isolate and ring fenced their investment arms. Fitch issued a statement which said:"The banking system is not only large relative to the UK economy, but there is also more advanced political will to reduce the implicit support for the country's banks,"Both Lloyds Banking Group and Royal Bank of Scotland had a rating of AA- prior to the downgrade but now their rating is A . I am not going to lose sleep over this news; it’s about time these dinosaurs get the taste of their own medicine – normally it’s the end user bank squeeze based on credit rating results.
Tags: agency, bank, credit, downgrades, Fitch, Lloyds, Rating, Royal, Scotland, tsb
Banking shares experienced a fall on the London stock exchange after Fitch's decision, showing Government to shift risks away from taxpayers and on to creditors but could see the cost of borrowing for the affected financial institutions increase.
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