Some of the world’s biggest financial institutions were hit with some unwelcome news on Thursday, as the credit ratings agency Moody’s issued downgrades on 15 banks, reports The New York Times.
Moody’s had earlier warned that a downgrade was possible. The downgrade came due to supposedly new risks for the industry since the financial crisis.
Citigroup and Bank of America were hit with some of the steepest downgrades and now stand just two notches above “junk” status. The other U.S. banks given downgrades include JPMorgan Chase, Goldman Sachs and Morgan Stanley -- though the latter’s downgrade was less harsh than had been expected, buoying its stock in after-hours trading.
"All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities," said Moody's Global Banking Managing Director Greg Bauer, according to Reuters.
The lower ratings mean that creditors could charge banks more on loans.