Oct. 6 (Bloomberg) -- Iceland's credit ratings were reduced by Standard & Poor's after the government pledged to guarantee all domestic bank deposits and gave regulators the power to take over bank assets and appoint new boards to obtain funds from lenders that may become ``inoperable.''

The long-term sovereign rating was reduced to BBB+/A-2 from A+/A-1, and the foreign currency rating to BBB/A-3 from A-/A-2, Standard & Poor's said in a statement today.

Last Updated: October 6, 2008 17:36 EDT