A leading ratings agency has cut the debt ratings for four of Australia’s largest lenders in the latest sign of the increasing scrutiny of the global banking industry, according to The Wall Street Journal. On Wednesday, Moody’s Investors Service lowered the ratings of Australia & New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank, and Westpac Banking Group by one notch to Aa2. The move brings Moody’s in-line with the ratings set by rivals Standard & Poor’s and Fitch Ratings.
Moody’s had previously said that it was reviewing the ratings of Australian banks due to the industry’s dependence on the global wholesale lending market, which can tighten in uncertain economic times. The banks responded to the downgrade by asserting that it was unlikely to affect their operations, and a spokesman for the country’s Treasury pointed out that the banks still retain among the highest ratings in the world. However, Roland Randall of TD Securities said that while the move was not a surprise, “it could still put even more pressure on funding costs.”