Moody's cuts credit ratings on 15 major banks

Associated Press, by Pallavi Gogoi, Jun. 21

NEW YORK (AP) — Moody's Investors Service has lowered the ratings of some of the world's largest banks, including Bank of America, JPMorgan Chase, Citigroup and Goldman Sachs.

The ratings agency said late Thursday that the banks were downgraded because their long-term prospects for profitability and growth are shrinking.

The ratings agency said it was especially concerned about banks with significant capital market activities during a time of increased volatility in markets.

A downgrade usually means that it becomes more costly for banks to raise money by selling debt. Investors demand higher interest for riskier debt, which is what the downgrades represent.

Moody's had said in February that it was considering downgrading the credit ratings of major banks.