Fitch Ratings downgrades Bank of America, Goldman Sachs

The Charlotte ObserverDecember 16, 2011 

Fitch Ratings downgraded Bank of America and seven other major banks on Thursday, citing the uncertain economy and a tough regulatory environment.

For the Charlotte-based bank, it marked the third downgrade in as many months. Now, all three of the major ratings agencies have pushed down its creditworthiness.

The Charlotte-based bank's long-term issuer default rating fell to "A" from "A+" in the move. Its short-term default rating and overall viability rating were downgraded as well.

A statement from Fitch said that Bank of America "will continue to lag major U.S. peers in capital strength while at the same time carrying higher-than-average overall risks," particularly in mortgage-related legal claims.

Wells Fargo's rating was unchanged. Goldman Sachs and Barclays were also among the downgraded.

The wave of downgrades came as Fitch completed a broad review of the largest banks. It also cut by about half its estimate of the number of banks that would likely receive government support in the event of a crisis. Eight banks are now on the list, including Bank of America and Wells Fargo.

Fitch's downgrade is the latest for Bank of America. Standard & Poor's cut Bank of America's rating late last month after reworking its criteria for evaluating banks.

Moody's downgraded Bank of America in September, citing Dodd-Frank financial reforms that make it less likely that big banks would again be rescued by the government.

Bank of America's stock rose 3 cents Thursday, closing at $5.26.

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