The biggest banks in America get a boost to their credit ratings because everybody knows the government will bail them out if they get into trouble.
Standard & Poor's even says exactly how big the too-big-to-fail boost is: three notches each for Citigroup, Bank of America and Morgan Stanley, and two notches for Goldman Sachs.
The banks have said that a downgrade of even one notch would force them to post billions of dollars in collateral, Bloomberg News notes. That in turn would leave them less money for making potentially profitable bets.
The financial-reform bill passed by the Senate explicitly bans government bailouts for failing banks. But, for now at least, the banks still have the implicit backing of the government, according to S&P.
The Senate bill still has to be reconciled with the House bill and signed into law, so it's still unclear what the final details will be, and how they'll affect banks' too-big-to-fail status.
"We do not expect [the bill's] effect, if any, on the ratings of financial institutions to be clearer until more information is available concerning implementation details and transition issues," S&P analysts wrote yesterday, according to the WSJ. "This assessment could take several months, even after the bill is passed into law."
Meanwhile, the ratings agencies themselves may also face some big changes under the new law. For more on that, see this post from earlier this month.