Moody's Investors Service has warned more than a dozen of America and the largest banks of Europe with important global capital markets operations it has been put under review for possible downgrades. Large US banks Moody under the control of possible downgrades were Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley.
Moody warning came on the heels of a warning prior to more than 100 European banks that they could also be downgraded. Although several global European banks such as Deutsche Bank and HSBC Holdings have been targeted by the previous downgrade warning, the warning later addressed the negative factors which were only confronted by banks with global capital markets operations.
Warnings of the downgrade reflect the more difficult environment that big banks are after a financial crisis which has seen many of them receive the support of the Government. Regulators are watching the activities of banks and banks will find it more difficult to receive support from the Government if an economic crisis, in part because of public anger on issues related to the last round of bail-out banks.
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