The U.S.'s biggest banks, including Citigroup, Bank of America, Goldman Sachs and JPMorgan Chase, may see their credit ratings cut by Standard & Poor's (S&P), as the government is viewed as less likely to provide aid to them in a future crisis.
The ratings agency placed the non-operating holding companies of the following banks on "credit watch negative" on Tuesday:
- Bank of America
- Bank of New York Mellon
- JPMorgan Chase
- Morgan Stanley
- State Street
- Goldman Sachs
- Wells Fargo
"Credit watch negative" means there is a 50 percent chance the banks' ratings will be cut within the next three months. S&P plans to conclude a review by year-end to determine whether it should continue to incorporate "extraordinary government support" in its rankings for systemically important banks — those whose collapse could damage the U.S. or global economy.
The agency's move came after the U.S. Federal Reserve approved a rule that would force large banks to hold a stockpile of debt that could be converted into equity in times of difficulty.