Citigroup, JP Morgan Chase, Bank of America, Goldman Sachs Group and Morgan Stanley will be the affected
According to Dow Jones News Service reported, the rating agency Moody's announced this week that lowered the bond rating of 17 global banks, the main reason is that these banks out of the woods, profitability has declined in the post-financial crisis period has not yet.
Earlier in February, Moody's had indicated that the rating will have 17 banks to be re-evaluated, including five U.S. banks, Citigroup, JP Morgan Chase, Bank of America, Goldman Sachs and Morgan Stanley. Financing more difficult, tougher regulatory requirements, income volatility to increase the profitability of capital markets is not as good as the level before the financial crisis, occupy a large proportion of the capital markets in banking, Moody's said.
According to Moody's statement, the results of the assessment of the different banks may differ. Among them, the Bank of America and Royal Bank of Scotland rating may be lowered one file; Citigroup, Goldman Sachs, JP Morgan Chase possible downgrade two tranches; Morgan Stanley rating may be lowered to the third gear.
Since Moody's announced that the bank rating assessment, evaluated five U.S. banks shares decline, analysts believe that the assessment is one of the reasons for these bank shares fell, because any demotion action means that banks The industry will have for the derivatives trading for more collateral, which may cause them to lose billions of dollars.
But bankers are still trying to play down the impact of the downgrade. Citigroup Chief Financial Officer Goss Patch May had bank customers,   Moody's review the way the bond rating can not adequately reflect the current strength of the business of Citigroup or its main banking subsidiary, Citibank and diversified performance. Investors are now in debt pricing, gradually began to consider various factors, rather than concerned about the credit rating given by Moody's and the other two rating agencies, Standard & Poor's and Fitch.
Morgan Stanley Chief Financial Officer Luce Porat told investors in April, Moody's downgraded the impact will be manageable. She pointed out that if Morgan Stanley downgrades to third gear, the bank restructuring only 8% of the derivatives contracts.



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