A rating which economic entities like businesses and governments look forward to and dread in equal measure is the credit rating. Devised by credit rating agencies such as Standard & Poor (S&P), it indicates the ability of the entity to pay back the debt accrued. The higher the likeliness is that the said entity can pay back the money, the higher the rating.
There are two main variations in the credit rating. One is the Sovereign Credit Rating for nations. The second is the Corporate Credit Rating for corporations and businesses. There is also a third variant which is applicable to individuals, known as Short-Term Rating.
Note: The following is a quoted article from Presstv.ir
Top US banks credit ratings fall
The credit ratings of America’s largest banks, including Bank of America, mostly fell from an A to A-minus status.
There are concerns the troubled bank may not have enough capital to withstand further trouble in Europe or another downturn in the U.S. economy.
B of A’s stock fell to a two-year low Tuesday before the ratings announcement. The other big banks stock fell as well.
But Wednesday stocks staged their biggest rally in three months as the US Federal Reserve and five other central banks worked together to make it cheaper for banks around the world to borrow US dollars.
S & P is one of the three big credit rating agencies. Washington Grove Institutes Webster Tarpley says Standard and Poors has too much power.
Tarpley says the credit rating system is unethical at best. “Whose guarding S & P they are running wild they are accused on insider trading amazing negligence.”
Top U.K. downgrades include Barclays, HSBC, Lloyds Banking Group and the Royal Bank of Scotland. Standard & Poor says changes in ratings of 37 financial companies reflect new criteria for banks and shifts in the industry as well as the role of governments and central banks worldwide.