Moody's Investors Service downgraded Bank of America Corp.'s and Wells Fargo & Co.'s long-term ratings and the short-term ratings of Citigroup Inc., finishing a more than three-month review by saying it believes the U.S. government is less likely to support the banks if needed.

Shares in Bank of America, which received the deepest cut, fell 3.2% to $6.68 in recent trading, while Citigroup's were down 0.3% at $26.86. Wells Fargo's were up 0.7% at $24.85.

Moody's said the probability that the government would allow a large bank to fail is greater now than it was during the financial crisis. While it said it the government is likely to continue to provide some level of support to systemically important financial institutions, the risks of failure contagion are less acute. As a result, Moody's reduced the amount of support it incorporates into the banks' ratings to levels reflected prior to the crisis.

The firm had put all three on review for downgrade on June 2.

Moody's downgraded Bank of America's long-term senior debt two steps to Baa1, which is three notches above junk territory. The downgrade finished the firm's review for a cut, and the outlook on the new rating is still negative. The firm specifically noted that the downgrades didn't reflect a weakening in Bank of America's intrinsic credit quality.

In a statement, Bank of America said it disagreed with Moody's conclusions. "In terms of factors within the control of Bank of America, Moody's states clearly that we have made significant progress in improving our capital and liquidity positions, shedding legacy and noncore assets, and managing risk," the company said.

Moody's downgraded Wells Fargo's long-term senior debt rating one notch to A2, which is midway between the triple-A highest possible credit rating and junk. The outlook is negative.

For Citigroup, Moody's affirmed its A3 long-term rating but downgraded the short-term rating to Prime-2 from Prime-1. The firms said the affirmation of the long-term rating reflected two offsetting factors: the lower probability of U.S. support versus an improvement in the bank's stand-alone credit profile. It said the outlook on the long-term ratings is negative.

Citigroup said in a statement that it disagreed with the short-term rating downgrade, although it was pleased with the Moody's affirmations.

"It does not accurately reflect the significant progress Citi has made since Moody's last rated Citi more than two-and-a-half years ago," the company said.

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