Twelve Major Banks Downgraded by S&P
Standard & Poor's lowered the credit ratings and outlooks for 12 major U.S. and European banks Friday, including Goldman Sachs and Bank of America, citing increasing industry risk and a deepening economic slowdown.
"We are raising our overall assessment of bank industry risk and believe there will be more volatility in funding markets," S&P said in a statement.
The major independent investment banks' business model has more risk due to more volatility in the funding markets, their reliance on short-term wholesale funding and confidence sensitivity, the rating agency said in a statement.
"The rating actions on GS also reflect our view that the cyclical downturn in GS's core investment banking, trading, and asset-management businesses could well be far more pronounced and extended than we had previously assumed," Standard & Poor's credit analyst Scott Sprinzen said in a press release.
Major Banks' S&P Ratings
|Bank||New Rating||Old Rating|
|Bank of America||AA-/Negative/A-1||AA/Watch Neg/A-1|
|Barclays Bank||AA-/Negative/A-1||AA/Watch Neg/A-1|
|Credit Suisse||A+/Stable/A-1||AA-/Watch Neg/A-1|
|Royal Bank of Scotland||A+/Stable/A-1||AA-/Stable/A-1|
|Wells Fargo||AA+/Negative/A-1||AAA/Watch Neg/A-1|