Irish bank deposits hit junk status

Bank of Ireland, College Green, Dublin

Read more: The $140 million home of Celtic Tiger bankrupt

Long-term deposits at Ireland’s top banks have been downgraded to junk status by rating agency Moody’s.

The company made the rating on deposits at Bank of Ireland, AIB, EBS and Irish Life and Permanent.
The move comes after the agency cut Ireland’s sovereign debt rating to just one mark above junk status last week.

The Moody’s agency has stated that the outlook on the long-term bank deposit and unguaranteed senior unsecured debt ratings of the Irish banks is negative.

It also said that the reduction in the level of systemic support embedded in Ireland’s deposit ratings follows the downgrade of the sovereign rating.

The agency believes that there is a high level of uncertainty that the government will extend further support to the banking sector if required.

The Irish government has already committed €35 billion as part of the EU/IMF support package.

“As a result, Moody’s is no longer incorporating any systemic support in the unguaranteed  senior unsecured debt ratings of the domestic Irish banks and these are now placed at the same level as the stand-alone ratings of the banks,” said a statement from Moody’s.

Just last week the agency cut the rating on Ireland’s foreign and local currency government bonds by two notches to Baa3 from Baa1, just above junk status.

Read more: The $140 million home of Celtic Tiger bankrupt

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