Consider us in the camp of "We'll believe it when we see Ken Lewis crying..."
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Bank of America Corp. (BAC), Citigroup Inc. (C) and Wells Fargo & Co. (WFC) may be downgraded by Moody’s Investors Service as the rating firm reviews whether the government will limit its support of the largest financial firms.
The banks’ present ratings are based on “uplift from Moody’s systemic support assumptions that were increased during the financial crisis,” the ratings firm said in a statement today. A review by Moody’s will “focus on whether these ratings should be adjusted to remove this unusual uplift and include only pre-crisis levels of government support.”
The banks are considered by investors to be too big to fail after receiving government aid in 2008 to bolster the financial system. Lawmakers have overhauled regulations and passed the Dodd-Frank legislation to avoid a repeat of the bailouts that aided firms including Charlotte, North Carolina-based Bank of America, which received $45 billion in assistance.
“‘The U.S. government’s intent under Dodd-Frank is very clear,” said Moody’s Senior Vice President Sean Jones. “It does not want to bail out even large, systemically important banking groups.”