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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