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Home > Diamond News Center > Diamond News > Financial News

Downgrade Could Trigger Loss of Billions for US Banks

/ Financial News
Three of the Wall Street's biggest banks stand to lose billions of dollars if their credit ratings are downgraded in mid-May as expected. Seventeen financial organizations, including Morgan Stanley, Bank of America and Citibank, may have their credit ratings re-evaluated by ratings group Moody's in six weeks' time, TheMarker reported.
If Moody's makes good on their threat to significantly reduce Morgan Stanley's rating, the latter's status would be lower than that of its rival bank J.P. Morgan.
For financial institutions that are dependent upon investor confidence, credit ratings are considered to be highly significant indicators. A lower credit rating would force the affected institutions to use more of their own resources to bankroll transactions that are considered to be of greater risk, TheMarker said.
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