Via the Irish Times:
IRELAND’S BANKING system has been downgraded by international credit rating agency Standard & Poor (SP) over concerns that continued weakness in the economy will push up the number of problem loans.
Little more than 12 months ago, Ireland was ranked alongside Canada and Sweden in group one, which includes those countries considered by S&P to have the strongest banking systems in the world.
This means that the strength of Ireland’s banking system is now ranked on a par with that of Greece. Other countries in group four include Korea, the Czech Republic and Slovakia.
The credit ratings of four individual Irish banks – AIB, Bank of Ireland, Anglo Irish Bank and Ulster Bank – were also cut yesterday by S&P.
This will raise the cost of borrowing and probably depress bank shares. The downgrade also speaks eloquently about the quality of credit on the books of Irish banks. Being bracketed alongside Greece - the poster child for dodgy dealings and unreliable financial disclosure - cannot be good news.