Major banks have credit ratings cut

SIXTEEN major world banks have had their credit ratings downgraded by Moody's, one of the three largest ratings agencies, because of the eurozone crisis and will now find it more expensive to borrow money.

Three French banks were on the list and marked down two notches: BNP Paribas, Société Générale and Crédit Agricole - along with five US banks, three UK banks - Barclays, HSBC and Royal Bank of Scotland - two Swiss and one German.

In a separate announcement, Moody's also cut the rating for the UK's Lloyds TSB by one notch.

Hardest hit was Credit Suisse, which saw its short-term rating dropped three notches in a surprise move, but the two American banks Citigroup and Bank of America were left with ratings just two notches above "speculative".

Moody’s Global Banking Managing Director Greg Bauer said in a statment "have significant exposure to the volatility and risk of outsized losses" in the world's financial markets. The agency fears bank profitability is set to fall.

The other banks were: Goldman Sachs, Morgan Stanley, JP Morgan Chase, UBS, Deutsche Bank and Royal Bank of Canada.

Bank bosses were not happy with the new cuts, which came after a four-month review, and the Royal Bank of Scotland said the cuts - which will cost it around £9billion - were "backward-looking".

Read the statement from Moody's on its web page