Moody's targets 17 global, 114 European institutions for downgrades

Feb 16, 2012, 5:51 GMT

New York - Credit Suisse Group AG, Morgan Stanley and UBS AG are poised for ratings downgrades of three notches, Moody's Investors Service said as it is reviews 17 financial institutions with global operations.

Ten of the institutions are headed for two-notch downgrades as the financial industry is engulfed in the eurozone debt crisis. They included Deutsche Bank AG, Citigroup Inc, Goldman Sachs Group Inc, HSBC Holdings Plc and JPMorgan Chase & Co, Moody's said late Wednesday.

It warned ratings cuts were also likely for 114 European financial institutions in 16 countries while nine of the 17 global institutions under review are based in Europe.

'Rapidly changing risk positions expose these firms to unexpected losses that can overwhelm the resources of even the largest, most diversified groups,' Moody's said in its review of the global banks and securities firms. 'Such challenges caused several issuers to fail, or to avoid failure only upon the receipt of external support, during the 2008 financial crisis.'

New challenges have also emerged for firms with substantial capital markets activities, Moody's said, including more fragile funding conditions, higher credit spreads, increased regulatory burdens, and challenging macroeconomic and market environments.