Moody’s Investors Service warned more than a dozen of America’s and Europe’s biggest banks with significant global capital markets operations that it was placing them under review for possible downgrades. The major American banks that Moody’s placed under review for possible downgrades were Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley.
The warning from Moody’s came on the heels of an earlier warning to more than 100 European banks that they might also be downgraded. Although several of the global European banks like Deutsche Bank and HSBC Holdings were covered under the earlier downgrade warning, the later warning addressed negative factors that were faced solely by banks with global capital markets operations.
The downgrade warnings reflect the more difficult environment that major banks find themselves in after a financial crisis that saw many of them receive government support. Regulators are taking a closer look at the banks’ activities and the banks will find it more difficult to receive government support if faced with another economic crisis, in part because of public anger over issues related to the last round of bank bailouts.
This news item was republished from eToro Forex news website
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