Moody’s Downgrades 15 Global Banks

Moody’s Investors Service has lowered the credit ratings and outlooks on some of the world’s largest banks, including Barclays, Bank of America, RBS, Citi, Morgan Stanley and Goldman Sachs, amid fears for the global economy and new banking regulations.

Moody’s said that it had repositioned the ratings of 15 banks and securities firms with global capital markets operations. The long-term senior debt ratings of four firms were downgraded by 1 notch, the ratings of 10 firms were downgraded by 2 notches and one firm was downgraded by 3 notches. In addition, for four firms, the short-term ratings of their operating companies were downgraded to prime-2. All four of those firms also now have holding company short-term ratings at prime-2. The holding company short-term ratings of another two firms were downgraded to prime-2 as well.

“All of the banks affected by (these) actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities,” said Moody’s global banking managing director Greg Bauer. “However, they also engage in other, often market leading business activities that are central to Moody’s assessment of their credit profiles. These activities can provide important ‘shock absorbers’ that mitigate the potential volatility of capital markets operations, but they also present unique risks and challenges.”

The changes were as follows:

Bank of America Corporation:

Long-term senior unsecured debt to Baa2 from Baa1, outlook negative; short-term P-2 affirmed.

Barclays:

Long-term issuer rating to A3 from A1, outlook negative; short-term to P-2 from P-1.

Citigroup:

Long-term senior debt to Baa2 from A3, outlook negative; short-term P-2 affirmed.

Credit Suisse Group:

Provisional senior debt to (P) A2 from (P) Aa2, outlook stable; provisional short-term (P) P-1 affirmed.

The Goldman Sachs Group:

Long-term senior unsecured debt to A3 from A1, outlook negative; short-term to P-2 from P-1.

HSBC Holdings:

Long-term senior debt to Aa3 from Aa2, outlook negative; provisional short-term (P) P-1 affirmed.

JPMorgan Chase:

Long-term senior debt to A2 from Aa3, outlook negative; short-term P-1 affirmed.

Morgan Stanley:

Long-term senior unsecured debt to Baa1 from A2; outlook negative; short-term to P-2 from P-1.

Royal Bank of Scotland Group (RBS):

Long-term senior debt to Baa1 from A3, outlook negative; short-term P-2 affirmed.

Moody’s said that it has also taken action on the following operating company ratings:

Bank of America:

Long-term deposit rating to A3 from A2, outlook stable; short-term to P-2 from P-1.

Barclays Bank:

Long-term issuer rating to A2 from Aa3, outlook negative; short-term P-1 affirmed.

BNP Paribas:

Long-term debt and deposit rating to A2 from Aa3; outlook stable; short-term P-1 affirmed.

Citibank:

Long-term deposit rating to A3 from A1, outlook stable; short-term to P-2 from P-1.

Credit Agricole:

Long-term debt and deposit rating to A2 from Aa3, outlook negative; short-term P-1 affirmed.

Credit Suisse:

Long-term deposit and senior debt rating to A1 from Aa1, outlook stable; short-term P-1 affirmed.

Deutsche Bank:

Long-term deposit rating to A2 from Aa3, outlook stable; short-term P-1 affirmed.

Goldman Sachs Bank USA:

Long-term deposit rating to A2 from Aa3, outlook stable; short-term P-1 affirmed.

HSBC Bank:

Long-term deposit rating to Aa3 from Aa2, outlook negative; short-term P-1 affirmed.

JPMorgan Chase Bank:

Long-term deposit rating to Aa3 from Aa1, outlook stable; short-term P-1 affirmed.

Morgan Stanley Bank:

Long-term deposit rating to A3 from A1, outlook stable; short-term to P-2 from P-1.

Royal Bank of Canada:

Long-term deposit rating to Aa3 from Aa1, outlook stable; short-term P-1 affirmed.

Royal Bank of Scotland:

Long-term deposit rating to A3 from A2; outlook negative; short-term to P-2 from P-1.

Societe Generale:

Long-term debt and deposit to A2 from A1; outlook stable; short-term P-1 affirmed.

UBS:

Long-term debt and deposit to A2 from Aa3, outlook stable; short-term P-1 confirmed.

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