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Moody's Credit Ratings Agency Downgrades 12 UK Banks And Building Societies

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The Moody's credit rating agency has downgraded the senior debt and deposit ratings of 12 UK banks and building societies.

Moody's says that the downgrades are a result of "the removal of systemic support" for seven institutions and the reduction in support for five others.

RBS and Nationwide have been downgraded two notches, while Lloyds TSB, Santander and Co-Operative Bank Plc have each been downgraded by one notch.

Seven smaller building societies were downgraded by one to five notches.

"Announcements made, as well as actions already taken by UK authorities have significantly reduced the predictability of support over the medium to long-term,|" Moody's said in a statement.

"Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions, which continue to incorporate up to three notches of uplift.

"However, it is more likely now to allow smaller institutions to fail if they become financially troubled. The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government."