Moody's Places 6 US Banks Under Review For Downgrade — Is Your Lender In This List?

Moody’s Investors Service has placed six U.S. banks under review for downgrade, saying the action reflects the extremely volatile funding conditions for some lenders exposed to the risk of uninsured deposit outflows.

What Happened: The six banks placed under review include First Republic Bank FRC, Zions Bancorporation NA ZION, Western Alliance Bancorp WAL, Comerica Inc. CMA, UMB Financial Corp UMBF and Intrust Financial Corporation.

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Moody's said the review will focus on the banks' variations in deposit amounts as well as the stickiness of its deposits going forward.

Apart from that, the agency has also downgraded the debt ratings of New York-based Signature Bank SBNY, which collapsed last week, into junk category. Reuters first reported this story.

The Federal Deposit Insurance Corporation, or FDIC, transferred all deposits and substantial assets of Signature Bank to Signature Bridge Bank, N.A., a full-service bank that will be operated by the FDIC as it markets the institution to potential bidders, according to a release issued by FDIC.

Banking and financial stocks have been taking a hard beating over the last few days as investors weighed-in the prospect of the crisis turning into a contagion. Market participants, however, also began considering the possibility of no rate hikes in the March Fed policy given the ongoing crisis.

Price Action: As a result, major Wall Street indices closed mixed on Monday with the SPDR S&P 500 ETF Trust SPY closing 0.14% lower and the Invesco QQQ Trust Series 1 QQQ gaining 0.74%.

Japan’s top brokerage Nomura has projected the Federal Reserve will cut interest rates next week and will halt quantitative tightening as policymakers evaluate financial stability risks in the wake of the Silicon Valley Bank collapse.

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