Moody’s Ratings Downgrade of US Banks
Moody’s Ratings cut deposit ratings for major banks like Bank of America and JPMorgan Chase due to US downgrade, citing weakened government support. The downgrade of the US government’s rating indicates less ability to support highly-rated obligations.
Key Points
- Moody’s downgraded deposit and debt ratings for major US banks like Bank of America and JPMorgan Chase
- The downgrade is a result of the US government’s weakened ability to support these banks
- This downgrade reverberates through companies, investors, and consumers who lend money to banks
Pros
- Reflects a more accurate assessment of risks associated with highly-rated obligations
Cons
- May lead to increased borrowing costs for affected banks