Moody’s Downgrades Ratings of 15 Major Banks —NYT Dealbook

The New York Times’ Dealbook reports that after putting banks on watch four months ago, Moody’s Investors Service on Thursday cut the credit ratings of 15 large financial firms, in a move that could do lasting damage to their bottom lines and weigh on the markets.

Already grappling with weak profits and global economic turmoil, 15 major banks were hit with credit downgrades on Thursday that could do more damage to their bottom lines and further unsettle equity markets.

The credit agency, Moody’s Investors Service, which warned banks in February that a downgrade was possible, cut the credit scores of banks to new lows to reflect new risks that the industry has encountered since the financial crisis.

“The risks of this industry became apparent in the financial crisis,” said Robert Young, a managing director at Moody’s. “These new ratings capture those risks.”

Citigroup and Bank of America, which have struggled to fully recover from the financial crisis, were among the hardest hit. After the downgrades, the banks stand barely above the minimum for an investment grade rating, a sign of the difficult business conditions they face.

Citigroup and Bank of America Were Among the Hardest Hit by Moody’s Recent Downgrades