FINANCIAL TIMES: Fifteen of the biggest global banks were downgraded on Thursday by Moody’s Investors Service, adding to pressure on their borrowing costs and questions over their business models.
Morgan Stanley, the focus of investor anxieties in the weeks leading up to the announcement, escaped the three-notch downgrade that the rating agency had threatened during its review of large trading banks. Its long-term credit rating was cut from A2 to Baa1, three notches above “junk”.
Morgan Stanley may have to post up to $6.7bn in additional collateral to derivatives counterparties and exchanges if another rating agency follows Moody’s action, according to regulatory filings. Goldman has said it would have to post up to $2.2bn with a two-notch downgrade… (more)
