SOURCE: Paragon Financial Limited

Paragon Financial Limited

December 01, 2011 08:16 ET

S&P Banking Downgrade Sparks Investor Panic in UK Financial Sector

The Paragon Report Provides Equity Research onThe Royal Bank of Scotland & HSBC Holdings

NEW YORK, NY--(Marketwire - Dec 1, 2011) - Major Banking stocks from across the globe took a hit earlier this week after Standard & Poor's Ratings Services downgraded dozens of large financial institutions citing a new methodology which reflects weaker confidence in governments' ability to bail out banks in trouble. The Paragon Report examines investing opportunities in the Foreign Banking Industry and provides equity research on The Royal Bank of Scotland Group PLC (NYSE: RBS) (LSE: RBS) and HSBC Holdings PLC (NYSE: HBC) (LSE: HSBA). Access to the full company reports can be found at:

www.paragonreport.com/RBS
www.paragonreport.com/HBC

Top UK downgrades included Barclays PLC, HSBC Holdings PLC, Lloyds Banking Group PLC and The Royal Bank of Scotland. Similar to the way a decline in a person's credit scores drives up the interest rates that banks and credit cards will offer, typically it costs companies more to borrow when their credit ratings are cut.

The Wall Street Journal notes that the move did not signal a change of any of the banks' individual credit metrics as much as a revision to the assumptions that had previously bolstered them. S&P's downgrades come after Moody's Investors Service said earlier this week that it would review junior debt ratings across the European banking sector, also based on the lower chances of government support if banks fail.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the Foreign Banking industry register with us free at www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters

UK Banking shares were already on the downswing this week after British Cabinet Minister George Osborne raised the Government's levy on banks during his Autumn Statement announcement. The levy was introduced by the Government to raise money and discourage banks from becoming overly dependent on unguaranteed debts in a bid to avoid another bailout.

The British Bankers' Association (BBA) said the sector expected to play its part in restoring public finances but The UK Press Association reports that bosses are furious about the increase in the levy.

The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at http://www.paragonreport.com/disclaimer