Three Government-guaranteed banks were placed on negative watch, raising the prospect of a possible ratings downgrade.

Fitch Ratings agency placed the ratings of Allied Irish Banks, Bank of Ireland and Irish Life and Permanent and their Government-guaranteed debt on negative watch. Ireland was put on negative watch last week along with Italy, Spain, Belgium, Slovenia and Cyprus.

The negative watch on Irish Bank Resolution Corporation, formerly Anglo Irish Bank, was maintained “to reflect the ongoing political risks surrounding the issue of burden-sharing for senior unsecured creditors”, Fitch said.

A decision will be taken “in the coming weeks” on the watch and whether to downgrade Irish Government debt.

The agency said it continued to believe Ireland is “likely to avoid a default or coercive burden-sharing for Anglo’s senior unsecured, unguaranteed creditors”.