Big Banks on Moody's Radar for Possible Downgrade

In what appears to be a dyspeptic moment, Moody's, a nationally-recognized bond rating organization, has put several of the biggest U. S.-based banks on its radar for a possible downgrade of their credit ratings.  The reason:  Moody's is skeptical that the U. S. government will bail out these banks should they get into financial trouble again in the future.

Bank of America, Citigroup, Wells Fargo, J.P. Morgan Chase & Co., Bank of New York, Goldman Sachs Group, Morgan Stanley and State Street Corp. are all affected.

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Moody's action may increase borrowing costs of these banks, which would have a ripple effect throughout the economy as the banks scale back their lending or increase interest rates and fees that they charge to customers.  This action by Moody's may or may not have a meaningful impact on the U. S. and global economies going forward.  But it surely does not help sustain any economic recovery that now is under way.