Wolfe was the lead author on Fitch’s commentary when the rating agency lowered its “operating environment score” for U.S. banks from a “AA” to “AA-“ in June. 

Fitch cited its recent decision to downgrade the country’s credit rating, gaps in the regulatory framework and uncertainty around interest rates.

The move went largely unnoticed because it did not prompt downgrades on banks’ individual ratings.

But if Fitch downgrades the industry’s score further, from “AA-“ to “A+”, the agency would be forced to reevaluate ratings on each of the more than 70 U.S. banks it covers, Wolfe said in an exclusive interview with CNBC’s Hugh Son.

Wolfe said if institutions like JPMorgan are cut, Fitch would have to at least consider downgrades on its peers’ ratings, which could push weaker lenders towards non-investment grade status.  

While the bank downgrade represents a real risk, Wolfe clarified that it was not a foregone conclusion. He declined to speculate on the timing of the downgrade and its potential impact on firms with lower ratings.

Wolfe’s comments come on the heels of recent downgrades that have disrupted markets.

Last week, Moody’s Investors Services downgraded 10 U.S. banks, placed major lenders including Truist Financial and Bank of New York Mellon under review for potential downgrades and changed the outlook for 11 banks to negative. 

The Hill’s Miranda Nazzaro has more here.