Standard and Poor’s announced last on Tuesday that is has downgraded major banks in the United States as well as UK.
Notable big banks saw their credit ratings cut, including Bank of America, Citigroup, Morgan Stanley, Goldman Sachs, Wells Fargo, J.P. Morgan, Bank of New York Mellon.
In a statement, S&P said it was applying its new ratings criteria for banks and reviewed its ratings on 37 of the largest financial institutions in the world.
Large banks in the UK were also downgraded, primarily Barclays, HSBC, Lloyds and RBS.
Most ratings were cut by one notch on nearly all banks.
Bank of America, Citi, Goldman Sachs and Morgan Stanley got cut to A- from A. Barclays and J.P. Morgan were cut to A from A+.
Overall this gives evidence that stress from the European banking system is taking its toll on a global level.
Surprisingly though, S&P upgraded some Chinese banks. Bank of China Ltd and China Construction Bank Corp. were up on notch to A from A- . S&P maintained the A rating on Industrial and Commercial Bank of China.
However the cut by on notch from A to A- will not have a huge impact since those ratings are still at a high level compared to the whole spectrum of ratings and are still well into the territory of investment grade.