Moody's Investors Service has downgraded long-term debt ratings of some of the world's largest investment banks, including Bank of America, Citigroup, Goldman Sachs, Credit Suisse and HSBC.
"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 the agency's statement late on Thursday.
Credit Suisse suffered the biggest hit as its ratings were cut by three notches on Moody's ranking scale.
Other financial institutions affected by Moody’s decision are JP Morgan, Morgan Stanley, Royal Bank of Scotland, Barclays, UBS, BNP Paribas, Credit Agricole, Societe Generale, Deutsche Bank, and Royal Bank of Canada.
Some of the banks were downgraded with a negative outlook, which means their ratings could be downgraded again later.
The ratings cuts will most likely cost the affected banks billions of dollars in extra funding and collateral expenses.
