IT is a tough old world, especially if you are a bank in a country struggling to escape the swaddling effects of decades of a command-style economy. Bank of China (BOC) has been a victim of events. Moody's Investors Service finally let the axe fall, announcing yesterday what the market expected: it had cut from A3 to Baa1 the long-term bond ratings of BOC, Bank of Communications, People's Construction Bank of China and Industrial and Commercial Bank of China. It cut the long-term bank deposits rating to Baa2 from A3, stymieing BOC hopes of getting its floating-rate certificate of deposit (FRCD) into the liquidity adjustment facility (LAF) run by the Hong Kong Monetary Authority. Access to the LAF is important for issuers, meaning Hong Kong's de facto central bank has weighed them up and found their debt securities meet the territory's toughest criteria. When it launched the issue, BOC's A3 long-term rating from Moody's just qualified it for the LAF and it seemed logical that BOC's issue should join the $3.2 billion Hongkong Bank deal, the previous record-holder for the biggest Hong Kong dollar debt issue. The bank's FRCD deal was a resounding success, attracting almost 50 bankers to the syndicate of lenders, including major banks from the United States, Europe and the region. 'BOC is a major contributor to the interbank market,' said one banker at the time of the FRCD. 'Joining the deal is a way of saying thanks for that.' BOC also has distinguished itself in the territory, gaining a reputation as a solid retail bank able to compete in an often brutal retail market. It also distinguished itself four years ago when one of the waves of panic that periodically seem to infect the Hong Kong community sparked a wave of bank runs. International Bank of Asia was hit. So was Citibank and, incredibly, so was Standard Chartered Bank, then one of Hong Kong's two note-issuing banks. BOC was a major force making sure that the bank runs were resolved quickly and efficiently. Together with Hongkong Bank it rallied round with billions of Hong Kong dollars to make sure depositors did not empty the other banks of funds. Sources close to the bank in its $5 billion deal said its levels of disclosure and compliance on the deal put some other Hong Kong dollar players to shame. It observed all strictures religiously, because it wanted the issue to succeed. Moody's said it was worried about the ability of the four mainland banks to make the transition to a commercial banking environment. Judging by BOC's performance in Hong Kong, it might be worrying unduly.