S&P Puts 23 Financial Firms On Negative Watch

NEW YORK (AP) — Credit ratings agency Standard & Poor's is reviewing whether to cut the ratings of 23 regional and national banks.

The firms were placed on "CreditWatch Negative" on Monday, which means there is a 50 percent chance the ratings will be cut in the next three months. S&P said it expects the results of the reviews by the end of May.

The negative watch is tied to an ongoing industrywide review S&P is conducting on the financial services sector, which has been battered for nearly two years by the credit crisis and ongoing recession.

Amid the review, S&P will look at potential mounting loan losses and earnings for the financial firms. The ratings agency will also try to determine how loan losses would affect a bank's cash cushion, possibly leading to a costly capital raise.

The 23 banks S&P placed on watch were identified in an initial review as likely to underperform compared with their peers amid the weakening credit and economic environment. They will now face a more detailed review.