Banks, Moody's | featured news

Moody's Investors Service Friday defended its decision to issue a slew of downgrades to Europe's biggest lenders after several of the continent's banks hit out over the "backward" nature of the review.

Moody's downgraded Bank of America's and Wells Fargo's long-term ratings and the short-term ratings of Citigroup, saying it believes the U.S. government is less likely to support the banks if needed.

European stock futures declined Wednesday as Moody’s Investors Service downgraded Societe Generale SA and Credit Agricole SA and Chinese Premier Wen Jiabao said developed nations should not rely on China to bail them out. U.S. futures and Asian shares dropped.

After a series of positive announcement from Greek FinMin Venizelos, rumors that Moody's would downgrade French banks and Germany was preparing for a Greece to default send equities tanking, particularly French banks.

Nearly one-third of 91 European banks undergoing the latest round of public stress tests could need external support to be brought up to scratch, Moody's said.

Moody's Investors Service said it may downgrade the debt ratings of Bank of America Corp, Citigroup Inc and Wells Fargo & Co, citing concerns about waning political willingness to offer support for the largest U.S. banks.