Yahoo Finance UK Banks Slapped With Credit Downgrades
Home owners and businesses face the prospect of higher interest rates after Britain's biggest banks had their status downgraded.
The credit ratings agency Moody's has slashed its assessments of 15 major world banks - among them RBS (LSE: RBS.L - news) , Barclays (LSE: BARC.L - news) and HSBC (LSE: HSBA.L - news) in the UK and JPMorgan, Goldman Sachs (NYSE: GS - news) and Citigroup (NYSE: C - news) in the US.
The downward move, which the agency announced it was considering in February, reflects fears that the banks' growth and profit prospects are declining.
Most European markets and the FTSE 100 (Euronext: VFTSE.NX - news) traded down slightly on Friday in response to the altered status of the affected banks.
:: Q&A - How Banking Downgrades Affect UKRead the Sky News blog of the downgrade aftermath:
The share price for Lloyds received a boost on Friday from the market, because it does not have a developed investment banking arm and concentrates more on retail operations than the other big UK banks.
A cut last month to the credit rating of Santander UK, the Spanish-owned lender, triggered speculation about the safety of customers' savings which was quickly dismissed by the bank.
The latest wave of downgrades will bring many of the other UK banks in line with Santander UK and there will be no resulting impact on the security of their savings.
On Thursday bank shares lost value in late trading on the FTSE 100, with RBS the biggest faller of the main UK banks.
