Moody's Investors Service said that it will reassess the level of government support in its debt ratings of banks, which could result in the credit rating agency downgrading its ratings on bank subordinated debt across several countries.

In total, Moody's said it will reassess the subordinated debt instruments of 177 banking entities across 46 countries. The decision was driven by moves to reform banking regulations and give regulators greater powers in dealing with distressed banks, the rating agency said.

"These reforms demonstrate the increased willingness and capacity of governments to share with debtholders the cost of bailing out a failing bank," Moody's said.

It added that the reassessment includes the European Union countries where it currently has bank ratings under review, MarketWatch reported.