New Credit Rating for Banks: S&P Downgrades Barclays, Deutsche Bank and Credit Suisse

By Douglas A. McIntyre Updated Jul 3, 6:30AM EDT · Published Jul 3, 4:32AM EDT

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S&P must believe that a new credit crisis is on the way, or at least there is a reasonably good chance there could be. It hit several of the world’s largest banks with downgrades, in particular Barclays PLC (NYSE: BCS), Deutsche Bank A.G. (NYSE: DB) and Credit Suisse Group A.G. (NYSE: CS), citing “increasing risks that Europe’s large banking groups active in investment banking face as regulators and uncertain market conditions continue to make operating in the industry more difficult.”

However, these risks have been in place for some time, which leads to the question of the credit rating agency’s timing.

S&P answered that question by saying:

we consider that these banks’ debtholders face heightened credit risk owing to the industry’s tighter regulation, fragile global markets, stagnant European economies, and rising litigation risk stemming from the financial crisis.

UBS A.G. (NYSE: UBS) dodged an action, and its rating was kept the same.

S&P wrote:

[I]t lowered its long-term counterparty credit ratings on Barclays Bank PLC, Credit Suisse AG, and Deutsche Bank AG to ‘A’ from ‘A+’. At the same time, we affirmed our ‘A/A-1’ long- and short-term ratings on UBS AG. The outlooks on these banks are stable.

If S&P’s opinion about the trend knocked the ratings down, there may be more to come.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.