The downgrades are part of a broad review of banks in the region that has had investors on edge but were mild compared to cuts for banks in weaker economies such as Spain and Italy.
Moody's said German lenders face risks to the quality of their assets if the euro zone crisis deepens or the global economy slows more, while also noting the relative strength of the German and Austrian economies.
Adding to fears of an escalation in the crisis, Spain said on Tuesday it was losing access to credit markets and appealed to its European partners to help revive its banks, a move likely to intensify global pressure on Europe to move quickly to the aid of its fourth-largest economy.
Commerzbank, Germany's second-largest lender, saw its long-term rating cut by one notch to A3 from A2 and assigned a negative outlook.
Other German banks Landesbank Baden-Wuerttemberg and Norddeutsche Landesbank GZ were lowered to A3 from A2 and given stable outlooks while Italy's UniCredit saw its German unit cut to A3 from A2 and given a negative outlook.
The agency delayed action on Deutsche Bank AG (DBKGn.DE) and its subsidiaries, saying that will come with reviews for other global firms with large capital markets operations.
In Austria, Moody's cut the long-term rating for Erste Group Bank AG (ERST.VI) by two notches to A3 from A1 and assigned a negative outlook while UniCredit Bank Austria AG was cut to A3 from A2, also with a negative outlook. Raiffeisen Bank International AG (RBIV.VI) was cut to A2 from A1 and assigned a stable outlook.
For the Austrian banks, Moody's noted vulnerabilities from operating conditions in Central and Eastern Europe and the Commonwealth of Independent States.
Moody's also noted limited loss-absorption capacities for both the German and Austrian banks.
Austria's central bank has been urging lenders to shore up their balance sheets, which it says are undercapitalised compared with international peers, but it has also taken issue with critics of banks' exposure to emerging Europe.
It said last week that analysts had to differentiate more about the risks posed by countries in the region, and noted that Austria had adopted an early-warning mechanism that flagged potential problems from excessive loan-to-deposit ratios.