Standard & Poor’s Ratings Services has begun upgrading its outlook on certain financial institutions to ‘stable’ from ‘negative’ following a similar shift in its view on the credit rating of the United States

S&P affirmed its sovereign credit ratings on the U.S. Monday, and revised its outlook on the long-term rating to ‘stable’ from ‘negative’, citing receding risks.

The rating agency says that the downside risks to its sovereign rating on the U.S. have diminished to the point that the likelihood that it will lower the rating in the near term is less than one in three.

“We do not see material risks to our favourable view of the flexibility and efficacy of U.S. monetary policy,” it says, adding that it believes the U.S. economic performance will match or exceed its peers’ in the coming years, and that the external position of the U.S. will not deteriorate.

“We see some risks that the recent improved fiscal performance, due in part to cyclical and to one-off factors, could lead to complacency. A deliberate relaxation of fiscal policy without countervailing measures to address the nation’s longer-term fiscal challenges could place renewed downward pressure on the rating,” it notes.

In the wake of this revised outlook on the U.S. sovereign rating, S&P has also revised its outlook on six insurance companies, including: New York Life Insurance Co., Northwestern Mutual Life Insurance Co., Teachers Insurance & Annuity Association of America, United Services Automobile Association, Knights of Columbus, and Massachusetts Mutual Life Insurance Co. However, the outlooks on Western and Southern Life Insurance Co. and core subsidiaries of Berkshire Hathaway Inc. remain negative, it notes.

It also revised its outlook on several clearing firms, The Depository Trust Co., National Securities Clearing Corp., and Fixed Income Clearing Corp., and Options Clearing Corp. to stable from negative, citing the sovereign rating move.

“The outlook revisions reflect our view that the ratings on these financial institutions are constrained by Standard & Poor’s assessment of the sovereign rating on the U.S., given their significant exposure to the creditworthiness of the U.S.,” it says