ABOARD AIR FORCE ONE (Reuters) - U.S. banks are in better shape due to reforms and steps to boost capital levels since the 2008 financial crisis, the White House said on Friday, but it declined comment on a credit rating downgrade of some of the country’s top financial firms.
“What I can say is that the American banking system today is stronger and more stable as a result of the president’s efforts to push for strong reforms in the Dodd-Frank legislation,” White House spokesman Josh Earnest told reporters traveling with President Barack Obama to Florida.
Ratings agency Moody’s on Thursday downgraded a number of the world’s biggest banks to reflect worsening credit conditions, including U.S. giants Citigroup, Bank of America, JPMorgan, Morgan Stanley, and Goldman Sachs.
Obama backed legislation, named after Democratic lawmakers Chris Dodd and Barney Frank, to curb the amount of risk that financial institutions can carry, and continued the work of the previous administration to bolster bank’s balance sheets.
“The kinds of reforms, including things like higher capital requirements for banks ... make it less likely that taxpayers would be on the hook,” because of bank failures, and therefore add strength to the system, Earnest said.
Reporting By Laura MacInnis; Editing by Bill Trott