Thursday, September 22, 2011

Moody's downgrades big banks on changed policy

Moody's downgrades big banks on changed policy
By Joe Rauch and David Henry
Wed Sep 21, 2011 6:05pm EDT

(Reuters) - Moody's Investors Service lowered debt ratings for Bank of America Corp, Citigroup Inc and Wells Fargo & Co on Wednesday, saying the U.S. government is getting less comfortable with bailing out large troubled lenders.

The government is "more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled," said the rating agency, a unit of Moody's Corp.

"This is crystallizing the fact we're in a new political reality," said Jason Ware, equity analyst with Salt Lake City-based Albion Financial Group.

Moody's decision hit Bank of America hardest, as it downgraded the long- and short-term debt of the holding company and long-term deposits at its main banking unit.

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