Moody's Investors Service said Thursday that it was upgrading
the ratings of four of the largest U.S. banks after the company
determined that some creditors would suffer fewer losses if those
banks were to fail.
Morgan Stanley received a two-notch upgrade, while Goldman Sachs
Group Inc., Bank of America Corp. and Citigroup Inc. all received a
one-notch upgrade. Moody's said that the increased levels of debt
issued by the big banks at the holding-company level in recent
years led it to conclude that senior unsecured creditors would bear
a smaller loss in the event of failure.
JPMorgan's ratings were unchanged because the bank relies more
on deposits for funding and less on other kinds of funding, Moody's
analysts said.
Morgan Stanley received the additional upgrade after Moody's
found that its business model had become more stable and their
profitability had increased in recent quarters. Under Chairman and
CEO James Gorman, Morgan Stanley has emphasized its
wealth-management business, which often generates stable
profits.
"The two-notch upgrade is an important codification of all the
work we have done and the consistency of our results," a Morgan
Stanley spokesman said.
--Daniel Huang contributed to this article.
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