Photo: ANP
Credit rating agency Moody’s says the outlook for the entire US banking sector has deteriorated. Over the weekend, two banks, Silicon Valley Bank and Signature Bank, collapsed as customers withdrew their money out of fear. According to Moody’s, other banks could also be affected by customers who prefer to store their balances elsewhere.
The outlook for the US banking system is now “negative,” according to Moody’s, while it was previously “stable.” This means that the credit rating is likely to be lowered in the foreseeable future.
The umbrella of the central bank of the United States, the Federal Reserve, has made it possible for emergency loans against certain bonds as collateral after the turmoil surrounding American banks. But according to Moody’s, the stakes are far from over. These are especially big for banks that have invested a lot of money in bonds that have depreciated due to high interest rates. Even if there are many business clients or account holders for whom large portions of their assets are uninsured, this can put pressure on banks as they withdraw their funds as a precautionary measure.
A Silicon Valley bank went bankrupt on Friday after a wave of banks ensued, in which account holders withdrew assets estimated at about $45 billion. The government took control of New York’s Signature Bank on Sunday because customers also came here to claim credit in droves. The New York State Financial Regulator also stated that it had lost confidence in the signature bank managers because they were not able to share reliable data.
