Moodys Cuts Outlook on US Banking System to Negative, The abandonment of the petrodollar system will result in persistent inflation. It’s going to cause a high-interest rate. It’s what will cause a lot of businesses to fail and a lot of jobs to be lost.
Moodys Cuts Outlook
On Tuesday, Moody’s Investors Service made a statement. It has changed its stable to a negative assessment for the entire US financial sector. Notwithstanding the regulators’ attempts to support the industry. They cited a “rapidly worsening operating climate”.
Also, the rating agency stated that it is thinking about downgrading. Along with five more American banks, First Republic Bank. Concerns about the stability of the US financial system have grown, prompting the action. after Silicon Valley Bank (SVB) and two other lenders went down.
Also, the rating agency stated that it is thinking about downgrading. Along with five more American banks, First Republic Bank. Concerns about the lenders’ reliance on uninsured deposit funding were mentioned by the agency. and unrealized losses in their portfolios of assets.
“The downgrading evaluation takes into account the severely erratic funding conditions. for some US banks vulnerable to the danger of uninsured deposit outflows,” it added.
Moreover, Moody’s downgraded the debt ratings of the defunct New York-based Signature Bank all the way to junk status. removing any future ratings for the bankrupt lender.
The downgrades occur as US bank stock prices
The downgrades occur as US bank stock prices continue to decline. It is despite government attempts to rescue lenders and avert any bank runs. The sell-off has been driven by First Republic Bank. due to a more than 60% decline in share price on Monday. volatility causing a momentary pause in trade. Western Alliance Bancorp lost over 47% while Zions Bancorp declined by about 26%. Dallas-based Comerica dropped 28% and UMB lost more than 15%.
One major US tech lender SVB collapsed on Friday, and the turmoil started. Customers rushing to withdraw their funds are to blame. That resulted in a reduction in the value of the shares. and caused the bank’s closure by the Federal Deposit Insurance Corporation. The biggest banking institution in the US is now SVB. Since the 2008 financial crisis, it is about to collapse.
