SOURCE: The Bedford Report

The Bedford Report

December 01, 2011 08:16 ET

Shares of Lloyds Bank and Barclays Come Under Fire as Government Raises Levy

The Bedford Report Provides Equity Research on Lloyds Banking Group & Barclays PLC

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 Bedford Report examines the outlook for companies in the Foreign Banking Sector and provides stock analysis on Lloyds Banking Group PLC (NYSE: LYG) (LSE: LLOY) and Barclays PLC (NYSE: BCS) (LSE: BARC). Access to the full company reports can be found at:

www.bedfordreport.com/LYG
www.bedfordreport.com/BCS

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 Bedford Report releases investment research on the Foreign Banking Sector so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.bedfordreport.com and get exclusive access to our numerous analyst 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.

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