United Kingdom, Europe protectionist steps to make business process outsourcing pie sour

Even as mounting job cuts, owing to the global meltdown, is pushing several countries to take a hard look at their policies, outsourcing, the obvious one, stares at policymakers in developed economies. In fact, UK and governments in European countries are expected to bring forth more stringent protectionist policies with respect to outsourcing,say industry experts. The obvious fallout: India’s outsourcing operations will face the heat with a dent in profitability.

Peter Redshaw, VP-IAS banking & investment services, Gartner Research, says, “In a bid to generate local jobs, the governments in the UK and Europe are looking at adopting protectionist policies with respect to outsourcing. Expect these policies to be more stringent than the ones coming from the US.”

Says Rodney A Nelsestuen, research director, cross industry research at Tower Group, “It’s a kind of political risk that governments are taking.

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Moody's cuts ICICI Bank UK's ratings

Global rating agency Moody's has said the longterm debt and bank deposit ratings for ICICI Bank UK, the British subsidiary of top Indian private sector lender, have been revised to a notch lower to bring it in line with the baseline credit assessment of the parent company.

While affirming the bank financial strength rating (BFSR) and a stable outlook on all ratings, Moody's said in its rating action note that the long-term bank deposit and senior unsecured debt ratings for ICICI Bank UK are being changed from Baa1 to Baa2, which is similar to the Indian parent's senior debt rating.

Moody's said that the current BFSR incorporates "a certain degree of volatility in earnings, which could potentially arise from the bank's large securities holdings".

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