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Moody's downgrades global banks

Moody’s downgrades global banks

(25 June 2012 – Global) Moody’s has downgraded the credit rating of 15 of the world’s largest financial institutions, due to exposure to Europe’s economic woes. Some of the biggest names in banking, including Goldman Sachs, Barclays, Citigroup, Credit Suisse, HSBC and Deutsche Bank, saw their ratings slashed, spelling increased scrutiny from markets and potentially higher borrowing costs.

JPMorgan’s long-term senior debt rating was cut to A2 from Aa3 and has been given a negative outlook. Morgan Stanley’s long-term senior unsecured debt was cut to Baa1 from A2 and was also assigned a negative outlook.

Morgan Stanley had been viewed as the US bank that could suffer the most from a Moody's downgrade, because of its relatively large trading operation and because of the extent of the cut that Moody's threatened.

Moody's announced the review on February 15, saying these global investment banks' ratings did not capture the evolving challenges of more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions.
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