Economy

Fitch Ratings downgrades Bank of America, Goldman Sachs

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.

To read more, visit www.charlotteobserver.com.

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