S&P Downgrades Goldman, 11 More Banks S&P, STANDARD & POOR'S, GOLDMAN, BANK OF AMERICA, WELLS FARGO, DEUTSCHE, UBS, BANKS, RATINGS CNBC.com | 19 Dec 2008 | 07:29 AM ET
Standard & Poor's lowered the credit ratings and outlooks for 12 major U.S. and European banks Friday, including Goldman Sachs and Bank of America, citing increasing industry risk and a deepening economic slowdown.
"We are raising our overall assessment of bank industry risk and believe there will be more volatility in funding markets," S&P said in a statement.
The major independent investment banks' business model has more risk due to more volatility in the funding markets, their reliance on short-term wholesale funding and confidence sensitivity, the rating agency said in a statement.
"The rating actions on GS also reflect our view that the cyclical downturn in GS's core investment banking, trading, and asset-management businesses could well be far more pronounced and extended than we had previously assumed," Standard & Poor's credit analyst Scott Sprinzen said in a press release.