Moody's may cut Bank of America, Citigroup, Wells Fargo

Moody's Investors Service said it placed the deposit, senior debt and senior subordinated debt ratings of Bank of America Corp. (A2 senior), Citigroup Inc. (A3 senior), Wells Fargo & Co. (A1 senior) and their subsidiaries on review for possible downgrade.

Each of these ratings currently incorporates an unusual amount of "uplift" from Moody's systemic support assumptions that were increased during the financial crisis, Moody's said.

The review will focus on whether these ratings should be adjusted to remove this unusual uplift and include only pre-crisis levels of government support, the agency said.

Moody's also said that it will assess improvements in Bank of America's and Citigroup's standalone financial strength and that this may temper the extent of any ratings downgrades that could result from the review.

Moody's also placed the prime-1 ratings of Bank of America's and Citigroup's holding companies on review for possible downgrade.

The prime-1 rating of Wells Fargo's holding company, Wells Fargo & Co., was affirmed.

Moody's also said it affirmed the prime-1 ratings of all three companies' banking operations, including the prime-1 ratings of Bank of America, NA, Citibank, NA and Wells Fargo Bank NA.

These actions had no impact on the FDIC-guaranteed debt issued by these firms, which remain at Aaa with a stable outlook, Moody's said.

Regulatory authorities continue to make progress in rulemaking, however, the final shape of the landscape remains uncertain, the agency said.

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