WASHINGTON, March 15 ― Moody’s Investors Service said yesterday that it has downgraded its outlook on the US banking system from stable to negative after the collapse of one of the 20 largest lenders in the United States that analysts say could create a contagion.
SVB provided financing for almost half of US venture-backed technology and healthcare companies. At the end of 2022, the bank said it had US$151.5 billion in uninsured deposits, US$137.6 billion of which was held by US depositors. Its total assets were US$209 billion as of the end of 2022. Moody’s also noted that while the Fed’s new temporary liquidity facility for banks could reduce contagion risks from the SVB fallout, “banks with substantial unrealised 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.”