Moody's threatens to downgrade 14 UK banks

Ratings agency Moody's is threatening to cut the ratings of 14 British lenders including RBS and Lloyds on concerns regulators including the Bank of England will harden their stance on future bailouts.

In a statement released today, Moody's said it had assessed 18 financial institutions in the UK which are receiving government support, and of these 14 face a downgrade because it believes UK regulators "do not currently have all the tools necessary to resolve such institutions without causing financial instability." In a review period which will last three months, the ratings agency will consider how the Treasury, the Bank of England, and the FSA would deal with the future failure of an institution, the "political acceptability" of further support from taxpayers, and the UK government's...