Friday, May 22, 2009
What if Britain loses its triple-A rating?
MoneyWeek: What if Britain loses its triple-A rating?
The potential downgrade of Britain's credit rating is more than just a technicality. So what would it mean for you if Britain ends up being downgraded?
Posted by damien @ 02:52 PM (823 views) Add Comment
4 Comments
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1. crunchy said...
AAA ratings are what caused this mess.
Take it away. The only AAA rating we have now, is the rating of a complete incompetent!
2. Little Professor said...
Latest news - Fitch downgrades the ratings of 5 UK building societies - West Brom, Newcastle, Chelsea, Principality and Yorkshire Building Society.
Fitch's concerns are concentrated on higher-risk lending by societies, which includes buy-to-let, self-cert, adverse, purchased loans and commercial mortgages,' said Matthew Taylor, senior director.
The weakening economic environment has increased the credit risk of the societies, as unemployment has risen and continues to rise, and house prices have fallen.
Societies have offered higher-risk buy- to-let, self-cert, second charge and adverse mortgages, which produce slightly greater revenues but which are also showing signs of strain as unemployment rises,' it said, pointing out that only a small number of loans need default to have a significant impact on the building societies' balance sheets.
3. little professor said...
Latest news - Fitch downgrades the ratings of 5 UK building societies - West Brom, Newcastle, Chelsea, Principality and Yorkshire Building Society.
Fitch's concerns are concentrated on higher-risk lending by societies, which includes buy-to-let, self-cert, adverse, purchased loans and commercial mortgages,' said Matthew Taylor, senior director.
The weakening economic environment has increased the credit risk of the societies, as unemployment has risen and continues to rise, and house prices have fallen.
Societies have offered higher-risk buy- to-let, self-cert, second charge and adverse mortgages, which produce slightly greater revenues but which are also showing signs of strain as unemployment rises,' it said, pointing out that only a small number of loans need default to have a significant impact on the building societies' balance sheets.
4. alan said...
LP,
these societies aren't very big, thank goodness. However it shows that the credit (bank solvency) crisis is far from over.
Brown has a little time to compose himself before announcing to the UK population that we have been relegated from the Premier division of the world's leading economies.
How best should he do this...?
Very soon we will have 3 football teams who are relegated from the Premier League: West Brom, maybe Middlesborough and perhaps Newcastle. He could get some clues from the managers' final speeches.
But I suspect he could try a last roll of the dice after the June local government elections trash NuLabour. MMmm how to play this one....?