Hello, shroob.
You've really written a long reply that is indeed very helpful. I think now my question is basically solved.
Having said that, I have to clarify that with my second interpretation, I wanted to find out whether downgrade, here in this specific context, could refer to a case in which a bank's rating is moved downwards. A bank's rating may be marked lower more than once. Then we can have a number of such cases, with more than one bank.
Richard
Not a teacher only a native.
You're welcome.
I have little knowledge of finance or economics, maybe someone who has more knowledge of this could answer you better, however I will attempt to the best I can. From what I understand, a bank would not get downgraded more than once for a single event. I will try and explain via a crude diagram.
For this example, the best credit rating you could have is 5, the lowest being 0. If a bank started with a credit rating of 4, then defaulted like in your example, the banks credit rating may go down to 2.
5 .................5
4 Rating......4
3 .................3
2 .................2 Rating
1 .................1
0 ..................0
You would say that bank had been downgraded. Even though the bank has fallen 2 places, it would still be classed as a single event. If you wanted to stress the extent of the downgrade, you could use such qualifying words such as, 'massively', 'substantially' or, 'seriously'. For example, 'The bank's credit rating was seriously downgraded'.
If you wanted to say that a bank had been downgraded more than once, this would suggest that
numerous downgrades had occured over time. For example if a bank defaulted twice:
5..................5 ..................5
4 Rating......4 ..................4
3..................3 Rating........3
2 .................2 ...................2 Rating
1..................1 ...................1
0 .................0 ...................0
Then you could say, 'the bank's credit rating has been downgraded numerous time since it has defaulted on its payment twice.'
I hope I have interpreted your question correctly, if not please feel free to ask again. Like I said, I'm not a teacher nor an expert in finance, hopefully a teacher will reply and voice their opinion on the matter.