Login / RegisterRoyal Bank of Canada and 14 other institutions see ratings downgraded by Moody's
One of the world's most influential rating agencies has downgraded 15 global banks. The list includes Canada's largest financial institution—the Royal Bank of Canada.
Moody's Investors Service reduced the Royal Bank's long-term deposit rating to Aa1 with a stable outlook from Aa3.
Many of the world's most familiar names in banking also saw their ratings reduced.
"All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities", Moody's Global Banking managing director Greg Bauer said in a statement. "However, they also engage in other, often market leading business activities that are central to Moody's assessment of their credit profiles. These activities can provide important 'shock absorbers' that mitigate the potential volatility of capital markets operations, but they also present unique risks and challenges."
Downgrades went to the Bank of America, JPMorgan Chase & Co., Citigroup Inc., Citibank N.A., The Goldman Sachs Group Inc., Goldman Sachs Bank USA, Credit Suisse AG, HSBC Holdings Inc., HSBC Bank plc, Morgan Stanley Bank, Barclays plc, and Deutsche Bank AG.
Other downgrades went to UBS AG, Societé Generale, Credit Agricole S.A., BNP Paribas, and Royal Bank of Scotland Group plc.
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"... several investment banks committed securities fraud when they failed to disclose that they were selling securities that were designed to fail so that the investment banks, and/or their hedge fund clients, could profit by betting on their failure. The Hudson and Timberwolf synthetic CDOs sold by Goldman Sachs, and which were the focus of the Levin Senate subcommittee hearings, provide a very strong basis for prosecution. Goldman's trading arm had been dragooned into finding and dumping their most dangerous assets to naive institutional investors. Important representations in the Hudson sales material--that assets were not sourced from Goldman's own inventory -- were lies, and they were material lies, since investors had learned to be wary of banks clearing out their own bad inventory. E-mail trails show that top executives closely tracked the garbage disposals and were gleeful at the unloading of the Timberwolf assets -- as they should have been, for the assets were nearly worthless within months. There have been no prosecutions."
http://www.huffingtonpost.com/charles-ferguson/how-wall-street-became-a-...
Really!
Next time some one calls me an asshole, I'll think of that.