(The following statement was released by the rating agency)

Dec 19 - Standard & Poor's Ratings Services today announced downgrades and
outlook changes to the ratings of 12 major U.S. and European financial
institutions.

We lowered our ratings on 11 institutions by one notch or two notches (see
list below).

The downgrades and revised outlooks reflect our view of the significant
pressure on large complex financial institutions' future performance due to
increasing bank industry risk and the deepening global economic slowdown.

We believe significant government intervention intended to stabilize the
sector and restore public confidence (see "How the Credit-Market Crisis is
Changing the World of Banking," published Nov. 25, 2008, on RatingsDirect)
may balance these pressures to a large extent. In an accompanying criteria
article ("Franchise Stability, Confidence Sensitivity, And The Treatment Of
Hybrid Securities In A Downturn," published Dec. 1, 2008), we also highlighted
the following new assumptions in our analysis:

-- We are raising our overall assessment of bank industry risk and believe
there will be more volatility in funding markets. In fact, we have lowered our
Bank Industry Country Risk Assessment (BICRA) on the financial systems of the
U.S. (AAA/Stable/A-1+) and the U.K. (AAA/Stable/A-1+) to Group 2 from Group 1.
Our BICRA rankings integrate our view of the strengths and weaknesses of a
country's banking system compared with those of other countries on a scale
ranging from Group 1 (strongest) to Group 10 (weakest).

The BICRA downgrades primarily reflect our opinion of the banking systems'
ongoing credit deterioration, the need for banks to rebalance their funding
profiles, and macroeconomic weakness, among other factors. (See "U.K. BICRA
Revised To Group 2 From Group 1 On Deteriorating Credit Conditions" and "U.S.
BICRA Revised to Group 2 from Group 1 on Increased Credit Deterioration," both
published Dec. 17, 2008, on RatingsDirect).

-- We are incorporating more sensitivity into our rating analysis for
reliance on short-term wholesale funding and for relative confidence
sensitivity of financial institutions' business models.

-- We expect higher levels of stress than those experienced during a
typical business-cycle trough.

-- We are placing more emphasis on risk-adjusted capital (RAC) measures.
We are developing a proprietary framework for assessing RAC that is more
risk-sensitive than Basel I and more conservative in most cases than Basel II
as it currently stands, particularly with regard to market risk and private
equity risk.

There are two types of government support factored into our ratings of
banks: "ongoing system support" and "extraordinary support". We view ongoing
system support from government authorities as an essential part of bank
creditworthiness in good times and bad (see "External Support Key In Rating
Private Sector Banks Worldwide," published Feb. 27, 2007, on RatingsDirect).
This system support principally comes through prudential regulation and access
to central bank liquidity, which can mitigate the high leverage and funding
mismatches inherent in bank business models.

Without these benefits, we believe bank balance sheets would be very
different. Our stand-alone assessments also integrate these system-wide
measures introduced to address near-term liquidity and funding concerns.

The prospect of future specific government intervention for financial
institutions under stress has, in the past, not been a part of our
stand-alone credit analysis in the U.S. Recently, many governments have
intervened directly as a result of or in anticipation of deeper solvency
pressures at specific institutions. Therefore, for the first time, we are
recognizing this extraordinary support for certain banks in the U.S.

Accordingly, for each U.S. and European institution that, in our opinion,
may be viewed as highly systemically important, we are publishing the Issuer
Credit Rating (ICR) and the number of notches of support we attributed to the
likely availability of future extraordinary support.

In particular, this means that our ICRs on several important U.S. and
European financial institutions include one or more notches of support over the
stand-alone credit profile.

The practical result of this approach is that none of these highly
systemically important financial institutions at the group or operating company
level is likely to have an ICR lower than 'A+' based on our expectation that
government support will likely be provided if needed. At the same time, none
would be assigned an ICR higher than 'A+' on the basis of extraordinary
government support.

Nevertheless, we believe that all of these highly systemically important
banks would receive support in the future if they were to require it; but we
view some of them as more likely to need it than others. To illustrate, if we
view an institution's stand-alone profile as 'A+' or higher, we have not raised
its ICR due to the likelihood of future government support. If in our view the
stand-alone profile is 'A' or lower, we have raised the ICR to 'A+' based on
our expectation that government support is more likely to be needed in the
future and will be provided. Therefore, the amount we have increased a
particular ICR now varies from zero to three notches, depending on our view of
stand-alone creditworthiness. We note that if our stand-alone assessment
weakens within the period that the government has clearly signaled that support
would be forthcoming, the ICR could still be maintained at the 'A+' level,
implying more notches of support.

In accordance with our published criteria, the assessment of stand-alone
creditworthiness for each institution reflects, among other things, our
updated estimation of the institution's asset-quality trends, risk appetite,
changes in risk-management capabilities, capitalization and funding profiles,
and strategy, as well as all forms of government support that the institution
has received so far or that have been committed by government entities.
However, the assessment of stand-alone creditworthiness is independent of
extraordinary government support.

Individual analysis and commentary on each institution is covered in
separate articles. As described more fully in those releases, recent events
have generally shown that institutions with lower stand-alone assessments
have greater levels of problem assets, higher risk appetites, and weaker
risk-management capabilities than we had previously believed.

We also believe that highly systemically important financial institutions
with ICRs that reflect notches of future government support also have a lower
risk of default because of that support.

However, we believe that business model-related issues have not yet been
sorted out and will take more time to resolve. Therefore, the stand-alone
profiles also reflect to varying degrees our view of the long-term fundamental
issues that some of these institutions are faced with--including the
confidence-sensitive nature of their business--and the likely upcoming
regulatory pressures that may require them to further decrease leverage,
reassess their risk profiles and risk appetite, and restrict certain business
activities in the near term. Finally, these assessments include our expectation
that these various measures may result in structurally lower profitability
levels and significantly higher loan losses in the medium term. Over time, the
risk profile for these institutions may also decrease. Accordingly, the
assessments of stand-alone creditworthiness are lower than the ICRs for five of
these institutions despite recent capital infusions and other forms of recently
provided government support.
We believe that the difficult operating environment will increase payment
deferral risk of most regulated financial institutions' hybrid capital
securities in the U.S. and Europe, including the large systemically
important banks covered in this review. This is because the difficult
environment is expected to pressure financial performance.