Moody’s Cuts US Banking System to Negative After Lender Failures
- Action comes after collapse of Silvergate, SVB, Signature
- Firm cites ‘substantial decline’ in depositor confidence
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Moody’s Investors Service cut its outlook for the US banking system to negative from stable, citing the run on deposits at Silvergate Capital Corp., SVB Financial Group’s Silicon Valley Bank and Signature Bank that led to the three lenders’ collapse in less than a week.
While federal regulators “announced that all depositors of SVB and Signature Bank will be made whole, the rapid and substantial decline in bank depositor and investor confidence precipitating this action starkly highlight risks in US banks’ asset-liability management exacerbated by rapidly rising interest rates,” Moody’s said in a research report late Monday.