This might be a bad day for the banks

RBS, Natwest and Ulster Bank, all owned by RBS of course, are not having a great day today. Many thousands of customers are having trouble getting at their cash. A technical problem in the IT systems meant that people's bank balances were not updated over night. So customers trying to get money out of cash machines or use their debit cards, who would have expected wages or other money to be in their accounts this morning, have had their transactions turned down. RBS is working to get this sorted out as 'soon as is humanly possible' they say. It is very much a technical problem, and nothing to do with the safety of the bank.

But later on their day is likely to get worse, and it's the same for some of our other big banks. After days of expectation, the Moody's ratings agency, is expected when to announce a downgrade of Britain's big banks. A fall in ratings, which essentially are a judge of how safe or risky an investment is, could make it more expensive for the banks to do business, because they might have to pay more to borrow. RBS has previously warned that a downgrade of one notch would cost them £12.5 billion. The fact is that money would have to come from somewhere, and most likely, that is going to come from the customer somehow. It's also a reminder of how connected we are to the stresses and strains of the eurozone's financial predicament.

This action has been expected for a while now, and bank sources argue that the impact of the downgrade might sound scary, but has already been priced into the markets. Some suggest the ratings agencies are just playing catch up. The Treasury will argue that the downgrade, which essentially judges how risky an organisation is, is due to at least in part, the fact that government reforms mean the banks are less likely to be bailed out in future if they get themselves into trouble. With less of a guarantee from the taxpayer, the banks are essentially a less safe bet. Whatever either the government or the banks say, this kind of announcement does give markets jitters and jangle the nerves. The announcement is expected to take place at about 9.30 tonight, after the close of the American markets.