I was startled to read in the Guardian and Daily Mail recently, just after the Governor of the Bank of England said that the world was facing its worst ever financial crisis, that 12 UK banks and building societies had their credit ratings downgraded. The downgrade had seen the share prices of these institutions tumble.
Oh, Lordie, my bank, the Co-op – renowned for its unwavering ethical stance – was included. Those with large amounts of savings were urged to move their money to safe havens amid fears that some banks would go under. Well I don't have large amounts of savings but it would upset me no end if the Co-op went under. I have regarded them as an oasis of rectitude in this snakepit of greed.
So I read on...the Guardian reported that “Moody's said that the downgrade of UK's banks was necessary because the government was stepping back from bailing out bank's when they ran into difficulty. The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government”.
So I'm asking myself, why downgrade the banks if there is no deterioration in their financial strength. And who are these people who seem to have the power to manipulate and destabililse whole countries' economies, sending share prices up and down with some people undoubtedly cleaning up as a result.
I've been on the hunt for more information about the credit ratings agencies and, if what I read is to be believed, I feel as if I'm living in a global cesspit.
In my next post you will see what I found in my search.