NU Online News Service, Nov. 18, 2003, 10:45 a.m. EST – There is nothing in Standard & Poor’s Ratings Services’ scoring methods or its outlook for commercial banking that would permanently rule out granting its top credit rating to commercial banks, says S&P, New York.
Some commercial banks have enjoyed S&P’s “AAA” rating in the past. So why are there no ‘AAA’-rated major banks in the U.S. currently?
It’s because such a bank should not only be financially and competitively positioned to survive, but it also should be able to prove it, by doing well following a period of severe financial stress, S&P says. Such a period is characterized by high unemployment and sharp declines in the nation’s gross domestic product.
“The recent period of mild economic contraction in the U.S. was in no way the kind of stress scenario that would truly test a bank’s ability to perform,” explains S&P credit analyst Michael T. DeStefano.