The rating agency on Thursday cut its rating for banks in the U.S., U.K. and Europe — 15 in all, including all of the “too big to fail” banks in the U.S.
In a press release announcing the downgrades, Moody’s said, “All of the banks affected by today’s actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities. In the past, these risks have led many institutions to fail or to require outside support, including several firms affected by today’s rating actions.”
Bank of America’s debt rating was cut by one notch. Citigroup, Goldman Sachs and JPMorgan Chase each took a two-notch downgrade.
Morgan Stanley’s rating, meanwhile, was also cut by two notches, to Baa1 from A2 — a break for the bank. Moody’s had warned in February that it could cut Morgan Stanley by up to three notches. Since then, the bank has vigorously contested the impending downgrade, pointing to capital it has raised and risks it has shed in the years since the financial crisis.
“Lower ratings will likely reduce the degree of trading activities over time at a particular institution,” CLSA bank analyst Mike Mayo wrote in a research report.
- The euro fell the most in five months against the dollar as Moody’s Investors Service lowered credit ratings on 15 global banks, adding to concern Europe’s debt crisis is worsening.
- Moody’s, as expected, has downgraded 15 banks with global capital markets operations. http://www.fxstreet.com/news/forex-news/article.aspx?storyid=9b39c0a7-0ada-4ff3-b415-a6fb07cdfd38
- Ratings agency Moody’s downgraded many of the world’s biggest banks on Thursday, lowering credit ratings of 15 companies by one to three notches. http://news.yahoo.com/moodys-downgrades-15-major-global-banks-214546741–sector.html