Standard & Poor's has downgraded the credit ratings of New Zealand's major banks, along with their Australian parents.
The ratings of ANZ, Commonwealth Bank of Australia, Westpac and National Australia Bank have been cut from AA to AA-.
The banks' New Zealand subsidiaries, ANZ New Zealand, ASB, BNZ and Westpac New Zealand, have also been downgraded.
The downgrades are the result of a global review of the way Standard & Poor's assesses banks' creditworthiness after the global financial crisis.
The agency is taking a tougher stance with banks which raise large amounts of money on global money markets.
The Australasian banks get a relatively large share of their funding from those markets.
ANZ New Zealand and BNZ say they remain financially strong despite the downgrade.
A director at Standard & Poor's, Gavin Gunning, agrees the banks remain strong by global standards.
He says the ratings would be stronger if New Zealanders saved more and borrowed less from foreign savers.
A lower credit rating could result in higher funding costs for the banks but BNZ Treasurer Tim Main does not think the downgrade will have a big effect on the banks' borrowing costs or mortgage rates.
Mr Main says the downgrades could push up the local banks borrowing costs slightly but he believes the deepening crisis in Europe is having a greater effect on those costs.
And Massey University banking lecturer David Tripe says higher funding costs may not flow through to higher mortgage rates.
He says the weakening outlook for the world economy may force central banks to lower official interest rates further.
That could outweigh any increase in funding costs brought about by the ratings cuts.
Earlier this week, Standard & Poor's also cut the ratings of European and American banks although it raised the ratings of several Asian banks.