LONDON (ShareCast) - Standard and Poor's (S&P) has cut its rating on Ireland's sovereign debt for the second time in recent months and warned that it could fall further.
The credit ratings agency dropped Ireland to AA from AA+ just
three months after it removed the country's top AAA (Xetra:
722800 -
news) rating.
"The fiscal costs to the government of supporting the Irish banking system will be significantly higher than what we had expected," S&P said.
"The rating could be lowered again if asset quality in the Irish banking system deteriorates at a faster pace than we expect."
Ireland has poured more than £6bn into Allied Irish Banks (Dublin: AIB.IR - news) and Bank of Ireland (Dublin: BIR.IR - news) and it's feared its "bad bank" plan could send national debt way above 100% of GDP.
S&P's outlook on debt remains 'negative', suggesting more ratings cuts may be on the cards.
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