Moody's Investors Service has downgraded the ratings of Bank of America Corp. (BAC) and Wells Fargo & Co. The rating agency said that the U.S. government is less likely to support the bank, if needed.

The rating agency lowered BAC's long-term senior debt to 'Baa1' from 'A2' and its short-term debt to 'Prime-2' from 'Prime-1'. 

Meanwhile, Moody's also downgraded Wells Fargo's supported long-term senior debt rating to 'A2' from 'A1'and those of its major subsidiaries such as Wells Fargo Bank. The rating on the bank's deposits were lowered to 'Aa3' from 'Aa2'. 

Unlike BofA, Wells Fargo's 'Prime-1' short-term rating was affirmed as was the unsupported hybrid ratings issued by or guaranteed by Wells. Its junior subordinated debt is at 'Baa1 (hyb)'. The rating agency said that the actions conclude a review for downgrade announced on June 2. The outlook on the long-term senior ratings for Wells remains negative.

In terms both banks' downgrades, Moody's said that the U.S. government is 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 have become less acute. The rating firm said that there is less of a likelihood that the U.S. government would support the banks.

The lowered ratings do not reflect a weakening of BAC's intrinsic credit quality. According to Moody's, BAC has made significant progress in improving its capital and liquidity positions, in shedding legacy and non-core assets, in measuring and monitoring risk, and in managing its risk appetite. These improvements have not, however, resulted in an upgrade of its stand-alone financial strength rating or in an offset to the declining assumption of systemic support in the long-term ratings. This, according to Moody's, is due largely to the risks that continue to be presented by the bank's exposures in its mortgage business.

The resulting uncertainty is a constraining factor on BAC's baseline credit assessment, especially in light of the bank's still relatively modest capital position compared to its major peers.

In terms of Wells, the rating agency said that it is lowering the amount of support it incorporates into the bank's ratings to levels reflected before the crisis.

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