MSE News: Banks' credit ratings downgraded 7 October 2011 at 2:11PM in Budgeting & bank accounts 14 replies 3.3K views

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"A ratings agency has slashed the credit ratings of some of Britain's biggest banks to reflect reduced Government support ..."

Read the full story:


Banks' credit ratings downgraded

King_Of_Bling

Doesn't make any difference to the average Joe. Only people who buy bank debt or invest very large sums in these banks need to evaluate the new scores.

Mandelbrot

So what?
Makes no practical difference to most of the people on this forum.

jjjenny

It's been coming for a while, with splitting the investment banks from the day to day banks, I spotted it as soon as the announcements were made ages ago. Lets face it, I have been winding up my friend who banks with Santander for up ages that her bank was next to fall, I'm suprised it's not been downgraded further to "G" for Greek or "J" for Junk.

Mandelbrot

Bit pointless downgrading the Norwich & Peterborough BS.
It's only got 3 weeks left!
(Merges with Yorkshire BS on 1st November)

JRsrule

Will that be the same credit ratings agencies which told us that all the bundles of debt were AAA? The bundles of debt that turned out to be bad debt, and caused the whole mess we are in now?

I'll make my own mind up thanks!

apt

And that the Icelandic banks were AA. Who rates the rating agencies?

Chris1001

King_Of_Bling wrote: »

Doesn't make any difference to the average Joe. Only people who buy bank debt or invest very large sums in these banks need to evaluate the new scores.

Are you sure? Poorer credit rating for these banks mean higher interest charges for money they need to borrow mean higher charges for anyone looking to borrow. That could be you or I? And, what if there's a further loss of confidence among institutions investing in these banks. A further reduction of their credit rating? What is going to stem the loss of confidence if it's not the UK government with promises of more bailouts?

Mobeer

apt wrote: »

And that the Icelandic banks were AA. Who rates the rating agencies?

The investors, who choose to listen to or not listen to the ratings

Consumerist

Mandelbrot wrote: »

Makes no practical difference to most of the people on this forum.

Well, it might. If it costs them more to borrow on the money markets then it might encourage them to increase their interest rates to savers.

opinions4u

Why don't they simplify the ratings?

A to Z with A being good and Z being virtually insolvent.

All the Aa2a+ and A2+ nonsense ... how are you meant to underatand good and bad at a glance from that?

(An !!! covering act from the rating agencies by the way, making up for them missing the possibility of the Credit Crunch).