Moody's set for bank ratings cuts Thursday: sources
By Rick Rothacker and Steve Slater
LONDON/CHARLOTTE, North Carolina (Reuters) - Ratings agency Moody's is set to announce downgrades of many of the world's biggest banks later on Thursday, banking industry sources said.
Moody's Investors Service has said it will release the ratings reviews on 15 major banks, including significant downgrades for many, by the end of June.
According to a source familiar with the matter the downgrades will be announced on Thursday after the market closes at 4 pm EDT.
The ratings cuts could increase funding costs for Morgan Stanley (MS.N: Quote) and other banks, and trading partners may ask for more collateral. But the impact could be muted if changes are in-line with indications given by Moody's in February on how much banks were likely to be cut by.
A spokeswoman for Moody's declined to comment on the exact timing.
Bank stocks were down Thursday in afternoon trading. Bank of America shares fell more than 3 percent to $7.87, while Morgan Stanley shares slumped 1.9 percent. The KBW Banks Index was down about 1.9 percent.
There has been speculation the downgrades were imminent for several days.
"The rating agencies are doing their best to point out that government support may not be what it used to be," said Peter Hahn from Cass Business School. Continued...