Irish banks’ ratings reduced to junk status

Moody's has downgraded its credit rating of Irish banks to junk status, just one week after the company also downgraded the Irish Republic's sovereign debt rating.

The long-term deposits of three Irish banks – EBS, Allied Irish Banks and Irish Life & Permanent – were decreased by two notches to Ba2. Bank of Ireland was also downgraded by one notch to Ba1.

The news brings added pressure to the eurozone's weaker countries, just as Ireland appeared to have turned a corner on the road to financial recovery. Last week Dublin's economic progress had passed a review by its international creditors, being told they were making "good progress" by the IMF and the EU.

Moody's, however, took a more pessimistic view of the situation, raising concerns for Ireland's ability to implement the necessary restructuring of its debt. "Should the intended fiscal consolidation goals not be met, a further rating downgrade would likely follow," a statement from Moody's read.

"Moreover, a further deterioration in the country's economic outlook would also exert downward pressure on the rating."

Read a full report at the BBC News. ·