by PNA - Ratings agency Moody's Investors Service announced downgrades of 15 world's biggest banks after the markets closed on Thursday.
Five U.S. banks were affected. The long-term debt ratings of Bank of America was slashed by one notch, while Morgan Stanley, Citigroup, Goldman Sachs and J.P.Morgan were cut by 2 notches.
Royal Bank of Canada and nine European banks, including Barclays, Deutsche Bank, BNP Paribas, UBS, Credit Suisse, Credit Agricole, HSBC Holdings, Royal Bank of Scotland and Societe Generale also had their ratings cut. Credit Suisse, the second-largest Swiss bank, received the maximum reduction of 3 notches.
"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 in a statement.
The ratings agency said the long-term prospects for profitability and growth of the 15 banks were shrinking.
After the downgrades, the borrowing costs for the banks were supposed to rise as investors would ask for higher return for buying their bonds.
In February, Moody's said that it would review the ratings of 17 global investment banks. Before Thursday's downgrade, it has already cut the ratings of Macquarie and Nomura.
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