>Further concerns over the state of UK banks was further exacerbated by Moody’s downgrading 12 UK institutions including 7 building societies.
by Dean Carter
What is more worrying, as this was an expected event, is some of the comments emerging from the ‘professional’ press. Today, one industry expert has been stating that it is always the smaller institutions that suffer, and on this occasion it is the building societies that will be most affected. He went on to state that they will now find is extremely difficult to raise funds. Not only was he not clear that he was talking about wholesale funds, but in my experience building societies have always been able to raise wholesale in some form or another and this downgrading should be no different. The potential downgrades have been in the pipeline for a number of months now and the only thing that was unexpected was the timing.
Unless we get the the confidence back in the market, no amount of quantitative easing or central bank support will bring back a liquid and open market. Maybe building societies need to look together at the way they raise wholesale funds and fight back against these negative press comments.
For further information, Dean Carter can be contacted on 07564 922761, or by email at [email protected]