One of the world’s largest credit rating agencies has issued downgrades to the biggest U.S. banks — making it more difficult for them to borrow funds. Bank customers need not fret over the lower credit ratings, but the macro-effects warrant more concern.

On Tuesday, each of the four largest banks in the United States had their credit ratings cut one level by Standard & Poor’s, a major private credit rating agency.

Bank of America® (NYSE:BAC) and Citigroup (NYSE:C) slipped to a credit rating of “A-” from “A”, marking them the least creditworthy of the bunch.

Recently, Bank of America® has encountered scrutiny surrounding debit card fees and struggles over capital. August rumors spread the possibility of a takeover by JPMorgan Chase (NYSE:JPM).

JPMorgan Chase’s credit rating fell to “A” from “A+”. The New York-based bank has just dethroned Bank of America® as the biggest bank in the country.

Wells Fargo (NYSE:WFC) remains the most credible of the group despite a downgrade to “A+” from “AA-”.

The banks’ credit ratings function similar to consumer credit scores, where better ratings means better borrowing rates. Having a credit rating agency issue a downgrade resembles a loss of faith in banks.

As a bank customer, the downgrades will virtually contribute to no change in individual accounts.

If there is anything to worry about, it’s the bigger picture.

Small Potential Crisis Repeat

Should a “too big to fail” bank find difficulty in maintaining capital, we may find ourselves in a situation similar to what caused the recent financial crisis. Capital troubles have led many banks to close their doors — a point where individual customers would begin worrying about their money in the bank.

Though it would only pose a slight inconvenience, consumer depositors will find their money covered under FDIC insurance and consumer borrowers may find their loans belong to a new institution.

Luckily, such dire straits don’t appear to have the legs to become reality.

In August, S&P had taken the U.S. government’s credit rating down a notch from “AAA” to “AA+” but we are yet to experience significant effects to interest rates across the board.

Remember there are two more credit rating agencies – Moody’s and Fitch – that have to weigh in, similar to consumer credit scores, there is a different score from each agency.

If the others follow the same footsteps as the S&P, it’s a sign of something to worry about.

Follow Simon in the Community and on Twitter: @simonzhen.

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