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Seventeen Banks Facing Downgrades

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  • Description

    FBN's Liz MacDonald on Moody's cutting bond ratings on as many as seventeen global banks.

  • Duration 1:59
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This transcript is automatically generated

During his -- -- term -- the too big to fail banks waiting for grades from Moody's.

And likely going to be downgrades was that McDonald is here with.

-- -- -- we just got off the phone with Moody's little while ago vause went on to that the banks about this.

Move that could come basically we're looking at possible downgrades facing seventeen banks by the end of this month.

This has been in the works since February what -- was they were gonna announce it and may Moody's ratings downgrades.

And then it got delayed because the eurozone crisis that's -- -- telling Fox Business -- is also telling Fox Business.

It is reviewing the two billion now climbing to possibly five billion dollar trading loss at JPMorgan Chase.

Whether that that impacts -- changes its decisions of the rating downgrade.

For JPMorgan and -- any other counterparty remains to be seen.

But here's what we know right now we know that essentially.

The banks face downgrades at Morgan Stanley of a possibly three notches.

We're also looking at Goldman Sachs facing a downgrade -- -- two notches BankAmerica one -- JPMorgan Chase faces a two notch downgrade now what you're looking at here is that if they get these downgrades.

-- three not just for example Morgan Stanley.

These banks are disclosing and -- SEC filings that they're gonna have to put up more money in what's called collateral.

As a capital cushion against they're trading book.

And also for their loans -- -- the estimates are seeing coming out of that banks right now Dennis and -- You know let's if if I was curious about what these banks exposure that they have dear I think -- delivered a question mark -- across support it's not just Europe and also Citigroup is essentially saying that.

Look you know -- -- just because one rating agencies gonna take action.

Our customers tend to be more sophisticated but this does affect you know -- cities and towns -- also affects some money market funds invest there and which commercial paper whether or not they're gonna -- in the bank's commercial paper town's commercial paper so it could roil the markets later in the month back to you guys.

-- it thank you very much back.

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