Three US banking giants have just had their ratings downgraded to “negative” by Moody’s.
Moody’s Investor Service downgraded JPMorgan Chase, Wells Fargo and Bank of America to negative ratings after previously classifying them as stable, MarketWatch reports.
Analyst Peter E. Nerby of Moody’s said that the worsening outlook on bank debt was due to “the potentially weaker capacity of the government of the United States of America (Aaa negative) to support the U.S.’s systemically important banks.”
In particular, JPMorgan’s downgrade was partially because the bank runs a “complex” capital markets business that may post “substantial” risks to its creditors.
A potential upgrade for JPMorgan “would depend on sustaining strong and stable performance and capital levels” above its competitors, Moody’s says.
Despite the downgrade from Moody’s,