Fitch Ratings has upgraded the credit ratings for the U.S. operating subsidiaries of eight U.S. global systemically important bank (G-SIB) holding companies.

Fitch moved Tuesday to upgrade the long-term issuer default ratings (IDRs) and senior debt and deposit ratings of the domestic operating companies of eight U.S. firms, including Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, State Street and Wells Fargo.

Fitch says that the upgrades reflect its belief that the resolution regime and added capital requirements for the major U.S. firms, along with the fact that the parent companies have substantial debt, reduces the default risk of the domestic operating subsidiaries’ liabilities.

“In our view these buffers would provide substantial protection to senior unsecured obligations in the domestic operating entities in the event of group resolution, as they could be used to absorb losses and recapitalize operating companies,” it says; adding that the presence of substantial debt at the holding company level reduces the likelihood of default on operating company debt.

Fitch has also revised the outlooks for the international operations of the eight firms to positive, reflecting the internal changes required under the Financial Stability Board’s (FSB) proposals for loss-absorbing capital requirements. It says that a one notch upgrade is likely once it has sufficient clarity on these changes; which it expects to occur in the next couple of years.