S&P Downgrades Dozens of Global Banks

From Fox Business:

Standard & Poor’s on Tuesday cut its credit ratings for many of the world’s largest banks, including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS) and Bank of America (NYSE: BAC). 

The move follows S&P’s shift, announced earlier this month, in the methods it uses for rating the banks.

Citigroup, Goldman Sachs and Bank of America Corp. each had their long-term credit rating downgraded a single notch to A- from A. Similar cuts were applied to JPMorgan Chase (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC) and Morgan Stanley (NYSE: MS).

Dozens of other banks were also affected by S&P’s new criteria and many of the downgrades stemmed from the affected banks’ exposure to the European debt crisis. S&P cited weaker confidence in governments' ability to bail out struggling banks.

The new criteria for rating banks comes in the wake of criticism leveled at all three major rating firms – Moody’s and Fitch’s are the other two -- that they rubber stamped their highest ratings on investment products loaded with subprime mortgages in the years leading up to the financial crisis.

Congress has considered reforming ratings system to remove perceived conflicts of interest.

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