Some of the world’s biggest banks were downgraded Thursday by rating agency Moody’s, which cited concerns about the stability of the global financial system.

Moody’s cut the ratings of 15 financial institutions after U.S. markets closed Thursday, including giants like Bank of America, Goldman Sachs and JPMorgan.

“All of the banks affected by today’s actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities,” Moody’s Global Banking Managing Director Greg Bauer said in a statement.

The news comes amid continued anxieties over Europe’s debt crisis and the havoc it could wreak on the global markets.

The downgrades could raise costs for the banks, making it more expensive for them to borrow money.

They may also make it more difficult for the banks to sell their commercial paper to money market funds. Commercial paper is a form of borrowing banks and other companies use to meet their short-term cash needs.

At the very least, downgrades are a source of concern for investors. Shares of major banks including Bank of America, Goldman Sachs, JPMorgan, Morgan Stanley, Citigroup and Deutsche Bank dropped between 1.7% and 3.9% in trading Thursday as downgrade rumors swirled.
The other major rating agencies, Standard & Poor’s and Fitch, cut their ratings on some of the largest U.S. banks at the end of last year. Banks have been trying to assure investors that they’re ready for any further downgrades ever since Moody’s first announced a review of the sector back in February.Morgan Stanley, whose long-term rating was cut two notches to Baa1, said in a statement that the Moody’s ratings “do not fully reflect the key strategic actions we have taken in recent years.”

Thursday’s move follows actions by Moody’s on banks across Europe over the past few weeks, including ratings cuts of German and Austrian banks earlier this month and downgrades of banks in Denmark, Sweden and Finland at the end of May.

The ratings of institutions in nations facing the most serious sovereign debt issues — namely banks in Spain, Italy and Greece — have already been downgraded by most of the ratings agencies several times.

(Source: CNN Money)