Moody’s Investor Service changed its view on the entire banking system from stable to negative Monday following the collapse of a major bank, according to CNBC News.
Silicon Valley Bank (SVB) collapsed Friday in the second largest bank failure in history, and the Treasury, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) announced Sunday that the government would fully protect all depositors. Silvergate Bank and Signature Bank (SNY). Moody’s downgraded its outlook on the entire banking system the following day, noting deposit runs at two other major banks, according to CNBC.
“We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in the report, according to CNBC.
HSBC is buying up SVB. They’re only paying £1 for it https://t.co/LVKgJT8enO
— Daily Caller (@DailyCaller) March 13, 2023
“Banks with substantial unrealized securities losses and with non-retail and uninsured US depositors may still be more sensitive to depositor competition or ultimate flight, with adverse effects on funding, liquidity, earnings and capital,” the report said.
Moody’s also announced Monday that it was downgrading or considering downgrading seven institutions, according to CNBC. Despite the federal government backstopping SVB, other banks with unrealized losses or uninsured depositors still could be at risk.
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Republished with permission from Daily Caller News Foundation