Moody's Investor Services said on Thursday it is reviewing 117 global banks and security firms for a possible downgrade.

Moody's said capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions.

The downgrade may catch UBS, Credit Suisse and Morgan Stanley which may be downgraded by three notches, while Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC Holdings, and Goldman Sachs may be cut by two levels, according to Moody's.