Pesky credit rating agency Moody's doesn't have faith that the British government will bailout its financial institutions so it downgraded twelve of them, DealBook reports. The banks included the Royal Bank of Scotland and Lloyds TSB but not Barclays and HSBC, Reuters noted. On the same day, Moody's also downgraded the standalone ratings of six Portuguese banks. In the systematic review of UK banks, the statement announcing the move tried to be a slight bit comforting:
Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions, which continue to incorporate up to three notches of uplift. However, it is more likely now to allow smaller institutions to fail if they become financially troubled. The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government.
Bank of America can sympathize.