The Obama Record: Moody’s didn’t quite say it, but its move to slash the credit rating of America’s No. 1 and No. 3 banks to near junk is based in part on the banks’ exposure to bad government risk.
Officially, Moody’s said its downgrading of Bank of America, Citigroup and three other major U.S. banks was due to their “significant exposure to the volatility and risk of outsized losses inherent” in a difficult global market environment. It also cited increased pressures from government regulations.
Indeed, the Dodd-Frank Act, federal lawsuits and other anti-bank pressures generated by this administration have made that environment all the more difficult.
Consider that three of the downgraded banks — BofA, Citi and JPMorgan Chase — are defendants in a $25 billion mortgage settlement led by Attorney General Eric Holder. He calls the record sum a “small measure of relief” for alleged “victims” of “unfair” mortgages.
Holder insists he’s not done shaking down banks. Pressure groups working with him say they won’t be happy until banks cough up at least $350 billion.
Separately, BofA must pay $335 million to minority borrowers in an unprecedented race-bias suit.
Truth is, this administration has put banks at risk. It’s a key reason they’re still under stress.