Fitch Ratings downgraded Bank of America (NYSE:BAC) to Negative from Stable Thursday, as ratings firms scramble to reassess risk after being slammed by investors and economists for not foreseeing massive asset overvaluation that has resulted in huge writedowns by banks worldwide. "Fitch's rating action reflects the fact that BAC's earnings have a significant level of sensitivity to trends in the deteriorating residential mortgage market," it said. "Management recently announced that it will increase provisions substantially to offset deterioration in home equity loans, and negative mark-to-market valuations in its mortgage-related holdings of collateralized debt obligations (CDOs) will be larger than previously anticipated."
Additional Reading: BofA: More Writedowns, 'Disappointing' Q4 Earnings • Citigroup Analyst Downgrades Several Banks
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