Moody's Investors Service said on Thursday that it was upgrading
ratings for several kinds of debt across three large U.S. banks
after it found that it was likely for those institutions to get
some government support in a crisis.
The ratings agency assumed that the bank subsidiaries of Wells
Fargo & Co., Bank of New York Mellon Corp. and State Street
Corp. would be less affected and record lower losses than other
institutions in the event that the Federal Deposit Insurance
Corporation put their holding companies into receivership.
That prompted Moody's to upgrade its ratings for the deposits,
bank-level senior debt and operating obligations of Wells Fargo and
Bank of New York Mellon as well as the operating obligations of
State Street Corp.
The move came as part of a broader review Moody's is doing of
the banking sector following the financial crisis and the
government's response to clarify when and how it would support the
banking system in future crises.
As part of that review, Moody's upgraded more than 90
bank-related ratings and downgraded about 40 others that it viewed
as less likely to be backed by the government in a crisis.
The moves mostly affect midsize and smaller banks. Moody's said
it hasn't yet finished its reviews Bank of America Corp, Citigroup
Inc, J.P. Morgan Chase & Co, Morgan Stanley and Goldman Sachs
Group, Inc. using this new methodology.
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