Moody's chopped its credit ratings for three of the top US banks - Bank of America, Wells Fargo and Citigroup - saying it saw the US government less willing than before to rescue them if they become unstable.

Moody's said it believed that the US commitment to save "systemically important" banks had diminished since the 2008-2009 crisis when the government extended hundreds of billions of dollars to financial institutions to keep the banking system from collapse.

It cited the enactment of the Dodd-Frank Act, a sweeping package of financial system reforms, which "demonstrates clear intent" to let bondholders of a big bank take losses if it is close to collapse.

"Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions," it explained in its statements on Bank of America and Wells Fargo.

"However, it is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute."

Bank of America, the country's largest bank by deposits, came in for the strongest ratings cuts, two steps - to Baa1 from A2 - on its more crucial long-term rating.

Wells Fargo fell to A2 from A1 on its long-term debt. Citigroup came off more lightly, seeing only its short-term rating dropped to Prime-2 from Prime-1.

Moody's said the drop in the risk of contagion - that one failing bank would bring others down with it - had lessened since the crisis, allowing the government to move away from an implicit blanket bailout stance for big banks.

"Now, having moved beyond the depths of the crisis, Moody's believes there is an increased possibility that the government might allow a large financial institution to fail, taking the view that contagion could be limited."

The harsher judgment on Bank of America did not suggest its credit quality was weakening, Moody's said.

The bank had made "significant progress" in boosting its capital strength and liquidity, citing its recent sales of large non-core assets and its improved management of risk.

But such moves have not been adequate to improve its overall rating, nor have they been enough to offset Moody's perception that the government's implied backing of systemically crucial banks had diminished, it said.

"This is due in large part to the risks that continue to be presented by the bank's exposures in its mortgage business," Moody's added.

That was a reference to the bank's troubles - including huge lawsuits - mainly from its purchase of Countrywide Financial, which during the US housing boom wrote hundreds of thousands of allegedly questionable and fraudulent home loans.

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