Moody’s has cut the credit ratings of big U.S. banks including Morgan Stanley, Goldman Sachs and JPMorgan Chase, after deciding that the federal government is less likely to bail the financial institutions out if they get into future difficulties.
Goldman, Morgan Stanley and JPMorgan had the ratings on their long-term senior unsecured debt lowered one notch to Baa1, Baa2 and A3, respectively, Moody’s said on Thursday. The credit ratings on the three banks’ subordinated debt were also cut by one notch.
The review by the second-largest rating agency, in terms of market share, follows a similar statement from rival Standard & Poor’s in June, and comes as governments attempt to avoid a repeat of the bailouts of the credit crisis era.
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