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Ratings downgrades for 15 global banks including Barclays and HSBC failed to rattle the sector this morning.
The review by Moody's credit agency was downplayed by the UK's major institutions, with Royal Bank of Scotland calling it "backward looking".
But the downgrades highlighted the risks posed by the eurozone crisis and combined with yesterday's dismal economic data in the United States helped drag the FTSE 100 Index 45.9 points lower to 5519.6.
Among the banks, RBS was down by around 1%, as it also battled major technical problems affecting its NatWest subsidiary.
Barclays slipped 1p to 201.3p and HSBC dropped 1.5p to 557.75p.
Economist Linda Yueh told ITV1's Daybreak that "these downgrades were well expected" and people are unlikely to "find a huge impact in terms of the borrowing costs".
Lloyds has reacted to the decision by Moody's to reduce its senior debt and deposit ratings by one notch to A2 from A1 and lower its standalone credit assessment to baa2 from baa1:
The Royal Bank of Scotland (RBS) has reacted to the decision by Moody's ratings agency to downgrade it by one notch on both the long term and short term ratings:
The downgrade of 15 banks announced by the ratings agency Moody's included a number of non-British banks. They are:
- Royal Bank of Canada - Aa3 from Aa1
- UBS - A2 from Aa3
- Credit Suisse - (P)A2 from (P)Aa2
- Bank of America - Baa2 from Baa1
- Citigroup - Baa2 from A3
- Goldman Sachs - A3 from A1
- JP Morgan and Chase - A2 from Aa3
- Morgan Stanley - Baa1 from A2
- BNP Paribas - A2 from Aa3
- Credit Agricole - A2 from Aa3
- Deutsche Bank - A2 from Aa3
- Societe Generale - A2 from A1
A spokesman for the British Bankers' Association (BBA) had this reaction to the decision by rating agency Moody's to downgrade British banks:
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Moodys' bank downgrades could result in higher mortgage prices and bank fees for consumers.