TORONTO Aug 8 Standard & Poor's said on Friday
it had revised its outlook on Canadian banks to "negative," due
to concerns the government is becoming less willing to bail out
banks in the event of a financial crisis.
The move comes a month after rival rating agency Moody's
also revised its outlook to "negative" from "stable," as part of
an annual review. The move followed Moody's decision in June to
revise its outlook lower on certain debt and deposit ratings at
In both instances, Moody's cited concerns about the Canadian
government's plans to implement a "bail-in" regime to avoid a
taxpayer-funded bank bailout in the event of a financial crisis.
S&P said its actions are based on the view that the proposed
bail-in policy regime might lead it to trim ratings on the banks
within two years.
The agency said it is revising its outlook on Royal Bank of
Canada, Toronto-Dominion Bank, The Bank of Nova
Scotia, Bank of Montreal, Canadian Imperial
Bank of Commerce and National Bank of Canada to
"negative" from "stable."
"The outlook revision reflects our expectation of reduced
potential for extraordinary government support arising from
implementation of the proposed new elements of the resolution
framework for Canadian banks," S&P's credit analyst Tom Connell
said in a statement.
(Reporting by Euan Rocha; Editing by Leslie Adler)