Moody's cuts debt ratings of four bank biggies

  NEW YORK: Moody's Investors Service cut the debt ratings for four big bank holding companies, including Morgan Stanley and           JPMorgan Chase & Co, citing its increasing confidence that the US govern The cuts may increase banks' borrowing costs and force them to post more collateral in derivatives trades, weighing on their profits. The downgrades also underscore how regulators are successfully convincing at least some parts of the bond markets that in a crisis, investors in the bank holding companies will likely have to take losses. ment will not bail out the companies if they fail.

Insurance Corp has hosted dozens of meetings with bond investors, analysts, and other stakeholders since last year to explain how this scenario would play out. In a statement on Thursday, Moody's managing director Robert Young said that the US government's bank regulators have created a credible plan. With the banks expected to receive less government support, Moody's said it was cutting its ratings for holding companies for Bank of New York Mellon Corp, Goldman Sachs Group Inc, JPMorgan Chase, and Morgan Stanley by one notch. 

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