Moody's Investor Service warned on Thursday it could downgrade the credit ratings of 17 global banks and securities firms due to more fragile funding conditions, increased regulatory burdens and a more difficult operating environment.
Moody's said it is reviewing the long-term ratings and standalone credit assessments of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Royal Bank of Canada.
The long-term ratings and standalone credit review of European banks includes Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC, Royal Bank of Scotland and Societe Generale.
Moody's said it was also extending the reviews of the long-term ratings and standalone credit assessments of Credit Suisse, Macquarie, Nomura and UBS.
The announcement came shortly after Moody's said it was taking ratings action on 114 financial institutions in 16 European countries to reflect the impact of the continent's debt crisis and the deteriorating creditworthiness of governments in the region.
"Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions," Moody's said in a statement.
"These difficulties, together with inherent vulnerabilities such as confidence-sensitivity, interconnectedness, and opacity of risk, have diminished the longer term profitability and growth prospects of these firms, the agency said.