Moody’s Investors
Service has warned that it might review the US for a possible credit
downgrade amid concerns about the current national debt crisis coming to
more than USD 14.4 trillion.
Bank of America, Citigroup and Wells Fargo Co may be downgraded by
Moody’s, the provider of credit ratings and research covering debt
instruments and securities, as the rating firm reviews whether the
government will limit its support of the largest financial firms, AFP
reported.
The banks’ present ratings are based on “uplift from Moody’s
systemic support assumptions that were increased during the financial
crisis,” the ratings firm said in a statement on Thursday.
Lawmakers have overhauled regulations and passed the Dodd-Frank
legislation to avoid a repeat of the bailouts that aided firms including
Charlotte, North Carolina-based Bank of America, which received USD 45
billion in assistance.
“The US government’s intent under Dodd-Frank is very clear,” said Moody’s senior vice-president Sean Jones.
“It does not want to bail out even large, systemically important banking groups.”
The credit rating agency says it expects to place the US’ rating
under review if political parties do not cut a deal to increase the debt
limit soon.
Democrats and Republicans have failed to reach an agreem…
