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Ratings agency Moody's downgraded 15 of the world's biggest banks on Thursday, lowering credit ratings by one to three notches to reflect the risk of losses they face from volatile capital markets activities, but banks criticized the move as backward looking.
"The biggest surprise is the three-notch downgrade of Credit Suisse, which no one was looking for," said Mark Grant, managing director at Southwest Securities Inc. "In fact, it was Morgan Stanley that was supposed to be downgraded by that amount and Morgan received only two notches of cuts."
David Mathers, Credit Suisse's chief financial officer, said the firm was pleased that Moody's continued to recognize it as one of the most highly rated banks in its peer group.
Besides Morgan Stanley, two other banks fared better than they could have. UBS could have been downgraded by three notches but was only bumped down two spots. HSBC could have fallen by two, but dropped only one notch.
Other banks downgraded by two notches were: Barclays , BNP Paribas , Royal Bank of Canada , Citigroup, Goldman Sachs Group, JPMorgan Chase , Credit Agricole , and Deutsche Bank .
Along with HSBC, ratings for Bank of America, Royal Bank of Scotland and Societe Generale were also cut by one notch.