Credit Suisse Cut 3 Levels as Moody's Downgrades Biggest Banks
June 21 (Bloomberg) -- Credit Suisse Group AG's credit
rating was cut three levels by Moody's Investors Service, Morgan
Stanley was reduced two levels and 13 other banks were
downgraded in moves that may shake up competition among Wall
Street's biggest firms.
Credit Suisse, the second-largest Swiss bank, received the
maximum reduction that Moody's said in February it may make
during a review of global banks with capital markets operations.
Morgan Stanley and
UBS AG (UBSN), the other firms singled out for such
a steep cut, were lowered two steps instead.
"All of the banks affected by today's actions have
significant exposure to the volatility and risk of outsized
losses inherent to capital-markets activities" Moody's Global
Banking Managing Director Greg Bauer said today in a statement.
The downgrades may force banks to post additional
collateral to trading partners in derivatives deals while
boosting the companies' borrowing costs. Moody's said when it
announced the review that it was seeking to reflect the banks'
reliance on fragile confidence in funding markets and increased
pressures from regulation and a difficult market environment.
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