Moody’s downgrades US banking sector outlook and places six banks on watch

Moody's downgrades US banking sector outlook and puts six banks on watch

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New York
CNN
 — 

Moody’s Investors Service cut its outlook for the entire US banking sector and placed six US banks on review for potential credit rating downgrades, in the wake of last week’s collapse of Silicon Valley Bank.

The credit ratings firm said it expects more banks will come under pressure after SVB’s failure — particularly those with large hoards of uninsured deposits and long-term Treasury bonds that have crumbled in value. Moody’s said it expects pressure on the banking sector to persist as the Fed continues to hike interest rates to combat inflation.

Another concern: US banks are raising the interest rates they pay on savings accounts. Although they hope the higher rates will retain customers worried by the collapse of SVB, that could also eat into profits, Moody’s warned.

The good news, Moody’s said, is that America’s banking system is generally…

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