UK Banks Get Slashed, Sector Down 3%
In the continuing financial contagion in Europe, Moody’s (NYSE:MCO) has cut financial ratings of 12 financial institutions (NYSE:XLF) from the U.K. (NYSE:EWU). The ratings agency cites concerns over lower or discontinued government support.
Among banks (NYSE:KBE) whose ratings were cut by a notch are Lloyds (NYSE:LYG) and Santander U.K. Royal Bank of Scotland (NYSE:RBS) was cut by two grades. Barclays (NYSE:BCS) and HSBC (NYSE:HBC) escaped unscathed with their ratings intact.
The action was apparently triggered by guidance provided by The Bank of England, FSA and the treasury that “banks shouldn’t expect a taxpayer-funded bailout in the event of failure,” according to Moody’s.
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