Fitch may downgrade Irish bank ratings

FITCH Ratings has placed the short-term issuer default ratings (IDRs) of Allied Irish Banks, Bank of Ireland, EBS Building Society and Irish Nationwide Building Society on rating watch negative (RWN).

This threat to downgrade the Irish banks a notch reflects the belief by Fitch that the Government will lessen the scope of its bank guarantee when it reaffirms the guarantee at the end of September 2010.

Commenting yesterday the agency said it expects such a move by the Government when it confirms its plan to keep the guarantee in place.