Banks, Credit Rating | featured news

Credit rating agencies turned up the heat on Barclays Plc, threatening to lower its credit ratings on concerns over who will run the bank following the departure of Chief Executive Bob Diamond and an uncertain strategy.

Moody's Investors Service Friday defended its decision to issue a slew of downgrades to Europe's biggest lenders after several of the continent's banks hit out over the "backward" nature of the review.

Moody's Investors Service lowered the credit ratings of 15 major banks Thursday, including Bank of America, JPMorgan Chase and Goldman Sachs, saying their long-term prospects for profitability and growth are shrinking. The ratings agency said it was especially concerned about banks with significant financial markets businesses because those markets have become so volatile. Some of the largest European banks were also downgraded, including Barclays, Deutsche Bank and HSBC.

The bond markets are treating Morgan Stanley like a junk-rated company, and the investment bank's higher borrowing costs could already be putting it at a disadvantage even before an expected ratings downgrade this month.

Spaniards alarmed by the dire state of their banks are squirreling money abroad at the fastest rate since records began, figures showed on Thursday, and the credit ratings of eight regions were cut.

Spain's latest credit rating downgrade has thrown into sharp relief the need to revive a banking sector that could need another 100 billion euros to cover bad debts in order to avoid exposing another weak flank in the euro zone crisis.

The ratings firm Fitch downgraded a cluster of the world's largest banks Thursday, pointing to trading challenges facing international markets. The banks included Bank of America, Morgan Stanley and Goldman Sachs, as well as Europe's Barclays, Societe Generale and BNP Paribas. Germany's Deutsche Bank and Switerzland's Credit Suisse were also downgraded.

Moody's downgraded Bank of America's and Wells Fargo's long-term ratings and the short-term ratings of Citigroup, saying it believes the U.S. government is less likely to support the banks if needed.

European stock futures declined Wednesday as Moody’s Investors Service downgraded Societe Generale SA and Credit Agricole SA and Chinese Premier Wen Jiabao said developed nations should not rely on China to bail them out. U.S. futures and Asian shares dropped.

The government panel, the Financial Crisis Inquiry Commission blames: Banks that made reckless bets, credit rating agencies that endorse risky mortgage-backed securities and government regulators who overlooked warning signs until they threatened the global financial system.