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S&P puts 8 US G-SIB holdco ratings on CreditWatch
November 3, 2015 / 3:22 AM / 2 years ago

S&P puts 8 US G-SIB holdco ratings on CreditWatch

SINGAPORE, Nov 3 (IFR) - Rating agency Standard & Poor’s said it had put the ratings of the holding companies of the eight US global systematically important banks on CreditWatch with negative implications, after the Federal Reserve last Friday outlined proposals on total loss-absorbing capacity requirements.

“The action reflects our belief that US regulators have made further progress and provided more clarity in enhancing their plans for resolving systemically important institutions - lowering the probability that the US government would provide extraordinary support to these institutions to enable them to remain viable,” S&P writes in a note.

S&P currently factors in one or two notches of extraordinary government support in its ratings for all eight US G-SIBs. Goldman Sachs and Morgan Stanley benefit from two notches of government support, while the other US G-SIBs - Bank of America, Bank of New York Mellon, Citigroup, JP Morgan, State Street and Wells Fargo - benefit from one notch.

The Fed’s notice of proposed rule-making included requirements that bank holding companies maintain minimum levels of capital and long-term debt that can be bailed in. (Reporting by Daniel Stanton; Editing by Vincent Baby)

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