The largest “too big to fail” banks were downgraded by Standard & Poor’s Wednesday based on the diminishing potential for a U.S. government bailout to come to the rescue when the next banking crisis occurs. The move has wide implications and raises questions as to the significance placed on a U.S. government assistance in the ratings formulas. Banks might no longer have government derivatives risk guarantee as they get downgraded JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley and BNY Mellon were all downgraded one notch with the title of the S&P report illuminating the key reason for…
Government Risk Guarantee Questioned, Big Banks Downgraded
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.