S&P has cut ratings on 8 US
banks, U.S. Global Systemically
Important Bank Holding Companies Downgraded Based On Uncertain Likelihood Of
Government Support
The agency said the move reflected its view
that the US government’s likelihood of providing aid to banks was now
“uncertain”.
Based on our review of progress made toward
putting in place a viable US resolution plan, we now consider the likelihood that the US government
would provide extraordinary support to its banking system to be “uncertain”
and are removing the uplift based on government support from our ratings.
The move comes after the Federal Reserve
proposed a rule on banks’ “total loss absorbing capacity”, or TLAC, earlier
this year, that said that banks must carry capital and liabilities equal to 18
per cent of risk-weighted assets that can be written off during times of
trouble.
Above
is a chart of the actions taken today from S&P:
the Federal Reserve will eventually
create a financial crisis far worse than 2008-2009 which will require an entire
reset of the United
States financial system.
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