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Coalition cannot walk away from banks, S&P says

THE UK Government would not be able to "walk away" from another banking crisis, according to ratings agency Standard & Poor's, but it warned it is likely to remove an assumption of state backing from its bank ratings in future years.

Any change in rating could have an impact on funding costs for part-nationalised RBS and Lloyds, owner of Bank of Scotland.

Like other banks, they are also currently battling gummed up money markets.

S&P, which rates debt issued by banks, other companies and governments, said its ratings services arm "continues to factor notches for the likelihood of extraordinary government support in a crisis into its ratings on systemically-important UK banks".