Ratings downgrades wear some of the blame 13 October 2008 5:47PM Philip Bayley It was rating actions that seemed to be behind much of the drama that continued in global financial markets last week. Indeed, Standard & Poor's placing of the B- long term credit ratings assigned to both Ford and GM on CreditWatch with negative implications on Thursday was a contributing factor in the 7.5 per cent plunge in US equity markets that day and which was mirrored here on Friday.Investor sentiment also appears to have been severely dented by Moody's Investor Service moving to review Morgan Stanley's A1 long-term credit rating for possible down grade. Morgan Stanley's share price fell as much as 46 per cent on Friday night our time, and weekend reports suggest the planned investment by Japan's UFJ is up for renegotiation. Fortunately for Goldman Sachs, Moody's affirmed its Aa3 rating but did change the outlook to negative, making much the same comments as it had on Morgan Stanley. Goldman's share price finished only 12.4 per cent lower. However, the rating action that set the tone for the week was S&P's downgrade of the Royal Bank of Scotland and main subsidiaries to AA- from AA and leaving the rating outlook negative.RBS, and HBOS, appear likely to be the main beneficiaries of the British government's investment in banks, with both set to become majority government owned, according to media reports from London over the weekend.