YEREVAN, August 23. /ARKA/. Moody’s Investors Service put the debt ratings of the six largest U.S. banks on review, reflecting uncertainty regarding U.S. policies for supporting distressed banks.
Moody’s placed on review for downgrade the senior debt ratings of Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM), Morgan Stanley (MS) and Wells Fargo & Co. (WFC). The senior debt ratings of Bank of America Corp. (BAC) and Citigroup Inc. (C) were placed on review, with direction uncertain, as the ratings agency takes into account improvements in the standalone credit strength of their main subsidiaries.
Moody’s said in March it would re-assess its assumptions for the support banks can expect to receive from the U.S. government.
Its review will consider the possibility of a lower level of systemic support in the event that a bank becomes financially distressed, as well as the potential for a more orderly workout and required minimum level of company debt that could limit losses.
Regulators are working with large U.S. banks on developing liquidation plans in the event of another crisis as the Federal Reserve pressures large U.S. banks to go beyond minimal requirements when setting capital plans.
“In the past year, we have seen progress towards establishing a framework to credibly resolve these large systemically-important banks, as called for under the Dodd-Frank Act,” said Robert Young, Moody’s managing director. He also noted increased cooperation among international banking regulators to manage global banking groups. –0–
