Thursday's Headlines: Moody's downgrades three top US banks
Moody's has cut the credit ratings of Bank of America, Wells Fargo and Citigroup,
arguing that the US government may no longer bail them out if they face financial problems, Dow Jones reports.
The rating agency cut Bank of America's long-term rating by two notches to Baa1, Wells Fargo's long-term rating by one notch to A2 and Citigroup's short-term rating by one notch to Prime 2, according to Dow Jones.
"Moody's said the probability that the government would allow a large bank to fail is greater now than it was during the financial crisis," Dow Jones writes. "It added, however, the government is likely to continue to provide some level of support to systemically important financial institutions."
This brings the ratings closer in line with five other "systemically important financial companies," namely JP Morgan, Goldman Sachs, Morgan Stanley, State Street and Bank of New York. "Now all eight companies are rated consistently with regard to possible government support," Dow Jones explains.
Merrill Lynch's Thiel revamps wealth management group; reduces regional division heads. [Reuters]
Lehman Brothers ends $11 billion lawsuit against Barclays over "secret discount" claims. [Financial Times]
BNP Paribas to eliminate "significant" number of investment banking positions. [Bloomberg]
Ex-Galleon trader Goffer sentenced to 10 years in prison for insider trading; Winifred Jau gets 4 [DealBook]
Jeff Gundlach wins $66.7 million judgment against TCW after dramatic court case. [Hedge Fund Net]
UK expands charges against UBS rogue trader, says he began fraud in 2008. [Wall Street Journal]
UBS CEO Gruebel struggles to keep investment bank despite calls for sale or split-off. [Reuters]
SEC charges ex-Goldman executive with giving his father insider trading information. [DealBook]
UBS senior bankers plan to golf in Pebble Beach despite $2.3 billion rogue loss. [Bloomberg]
BNP Paribas executives tour Middle East as they try to raise capital, assuage investors. [Financial Times]
Volcker rule revision may allow banks to continue taking big risks with own capital. [Wall Street Journal]
Average prison term in Galleon insider trading case is 3 years. [Bloomberg]