Moody’s warns over bank markets

CREDIT ratings agency Moody’s has warned that Irish banks could remain outside regular inter-bank lending markets if bondholders are forced to share the burden of losses.

Moody’s yesterday downgraded the unsecured senior debt ratings of six Irish banks — AIB, Bank of Ireland, Irish Nationwide, Anglo Irish Bank, the EBS Building Society and Irish Life & Permanent — over concern that bondholders will have to share in the cost of bailing out the country’s banking system.

The agency warned that Ireland’s main banks could remain “locked out” of inter-bank lending markets if the incoming Government imposes losses on the aforementioned debt.