Rate cuts in question as bank ratings cut
The big four banks have had their credit ratings slashed, in a move that is tipped to dramatically reduce the chances of a rate cut being passed on in full next week. Standard & Poor's has cut ANZ, Commonwealth Bank, National Australia Bank and Westpac one notch to AA-minus, the fourth-highest credit rating on S & P's scale. Macquarie Group was cut by two levels to BBB.
The move is tipped to pile pressure on the nation's top banks, with the funding costs for Australia's banks already starting to surge.
The news comes as fellow ratings agency Moody's yesterday warned that Australia's banking system faces “crucial challenges” over the coming year, with global investors to potentially snub the banks as funding costs climb and the world economy slows.
Source: The Daily Telegraph