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British banks downgraded for second time within a week
Oct 13, 2011, 16:08 GMT
London - Two part-nationalized British banks were downgraded by ratings agency Fitch Thursday which said the likelihood of renewed government support for them had declined.
The downgrading of the Royal Bank of Scotland (RBS) and Lloyds TSB from an AA rating to A followed a similar move by ratings agency Moody's last week.
Fitch, citing the importance of the finance and banking sector for the British economy, said that there was now 'more advanced political will to reduce the implicit support for the country's banks.'
RBS, in which the government has a stake of 83 per cent, has recently rejected speculation that it might require additional capitalization as a result of the Greek debt crisis.
The downgrading has also been linked to recent recommendations by an independent commission - likely to be implemented by the government - that big British banks should in future separate their retail business from their investment arms.
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