Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Living Wills and Bank Downgrades

Moody's has warned that the Financial Services Authority, the UK banking regulator, is creating a ratings problem with the proposal for implementing "living wills" for banks.  These living wills would be prepared by banks to document how they should be dismantled in the event of financial difficulty.

Moody's says that this removes the expectation of government backing for troubled banks.  Unless more capital was raised, the rating of such a bank would have to be lowered, according to Moody's.

I have just one comment:  The truth shall set you free.  How can transparency be bad?

Read about this at in an article by Jane Croft and Patrick Jenkins (here).