Moody’s Bank Downgrades of Bank of America and Wells FargoAssailed as ‘Too-Big-to-Fail’ Persists - by Dakin Campbell and Donal Griffin

Moody’s cut the long-term credit ratings for Bank of America and Wells Fargo yesterday and said the government is “more likely now than during the financial crisis” to let a large U.S. bank collapse, according to a statement. The ratings firm said the two banks and Citigroup Inc., which had its short- term rating downgraded, benefitted more than others from underlying government support.

“They need to defend this move with logic, not just, ‘This is our methodology,’” said Nancy Bush, an analyst at SNL Financial, a bank-research firm in Charlottesville, Virginia. Moody’s likely is protecting itself “in case there is another downdraft, since they were caught absolutely flat-footed in 2008 by slapping AAA on everything,” she said.

For more: Moody’s Bank Downgrades of Bank of America and Wells Fargo Assailed as ‘Too-Big-to-Fail’ Persists - Businessweek