Earlier today, the folks at Moody’s Investors Service cut Bank of America’s credit ratings after it came to the decision that, should the nation’s largest bank fail, it would be less likely to receive bailout support from the federal government.

Moody’s downgraded ratings for BofA’s long-term senior debt and short-term debt because of a “a decrease in the probability that the US government would support the bank, if needed.”

The agency explains that the overall climate has changed since the bubble burst in 2008 and banks were failing at potentially disastrous rates: “It is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute.”

A rep for Bank of America tells CNN:

While we disagree with their conclusions and we believe our ratings should be higher, to minimize any potential impact of this decision on our business, we have been managing our liquidity carefully and we have prefunded our planned borrowing needs for the year.

Moody’s also downgraded the credit ratings for Wells Fargo’s long-term debt and Citigroup’s short-term debt, citing similar reasons. Bank of America took the biggest hit from the downgrades because of the oodles of questionable mortgages it inherited when it purchased Countrywide.

Moody’s Cuts Rating on Bank of America [DealBook]

Moody’s cuts BofA, Citi, Wells fargo ratings [ChicagoTribune.com]

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