Moody’s downgrades JPMorgan, Bank of America, Wells Fargo in blow to U.S. banks

Moody’s Ratings on Monday downgraded the long-term ratings of several of America’s largest banks, including JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC), and Wells Fargo & Company (NYSE:WFC), citing weakened prospects of federal support following Friday’s U.S. sovereign downgrade. The move marks a rare blow to the top tier of the U.S. financial system and may raise borrowing costs and regulatory pressure on institutions still seen as systemically important.

The rating agency lowered deposit ratings, senior unsecured debt, and counterparty risk assessments for key subsidiaries and branches of the banks to Aa2 from Aa1. These ratings had previously included a notch of uplift tied to the government’s Aaa rating, support Moody’s no longer deems as fully credible following the downgrade of U.S. sovereign debt to Aa1.

“The downgrade of the US Government’s rating indicates that it has less ability to support the US’s global systemically important banks,” Moody’s said. “The ratings and assessments downgraded in today’s action all previously incorporated one notch of US Government support uplift and this notch of support has now been removed.”

https://finance.yahoo.com/news/moody-downgrades-jpmorgan-bank-america-182747232.html