In Moody's view, the longer the liquidity crisis continues, the more rapidly the probability of defaults will continue to rise.

BBC: Are markets betting on IMF bailout of Italy?

"In view of the uncertainty generated by Moody's' surprising announcement, Ambac is assessing the impact of this action on the company's previously announced capital plan, " the company said in a statement.

FORBES: Magazine Article

Moody's downgraded 28 Spanish banks, reflecting the agency's view that Madrid's ability to provide support to the local banking system has declined.

WSJ: U.S. Stocks Close Higher

"If the question has become when, and not if, a lawsuit will be filed against Moody's, then the shares are simply unbuyable, in our view, " an analyst at US investment firm BTIG, Mark Palmer, told Reuters.

BBC: Moody's shares fall amid rating agency legal fears