BofA, Wells Fargo Downgraded by Moody’s
September 21st, 2011Via: Bloomberg:
Bank of America Corp. (BAC) and Wells Fargo & Co. had their long-term credit ratings downgraded by Moody’s Investors Service, citing a decreasing probability that the U.S. would support the lenders in an emergency. Citigroup Inc.’s short-term rating also was cut.
The government is “more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute,” Moody’s wrote in statements today on Bank of America and Wells Fargo. While Citigroup may lose backing as well, its stand-alone credit has shown improvement, Moody’s said, confirming the bank’s long-term rating.
U.S. financial companies may lose their too-big-to-fail status as regulators create a system for dismantling large firms that get into financial trouble. Lawmakers have vowed to prevent a repeat of taxpayer-funded bailouts after 2008’s credit crisis.
