S&P says not seen rampant deposit outflows to merit rating action
Reuters
Published Mar 15, 2023 05:08AM ET
(Reuters) - S&P has not placed other U.S. banks on CreditWatch negative since First Republic Bank (NYSE:FRC) as it has not seen widespread deposit outflows, the ratings agency said on Tuesday, hours after Moody's (NYSE:MCO) cut its outlook on the U.S. banking system to negative.
The collapse of Silicon Valley Bank had sparked a crisis of confidence in the banking sector, leading to a run on deposits at a host of regional banks despite U.S. authorities launching emergency measures to shore up confidence.
Earlier on Tuesday, S&P Global (NYSE:SPGI) Ratings placed First Republic Bank on CreditWatch negative, reflecting lower confidence in the lender's financial strength.
However, later in the day, S&P said it had not seen evidence that the unmanageable deposit outflows seen at a few banks had widely spread across the banks it covers.
S&P said U.S. regulators' measures gave banks additional liquidity, although the ratings agency cautioned that conditions were fluid and that some banks were showing greater signs of stress than others.
Moody's Investors Service revised its outlook on the U.S. banking system to "negative" from "stable" earlier on Tuesday to reflect the rapid deterioration in the operating environment.
However, Ron O'Hanley, the chief executive officer of asset manager State Street Corp (NYSE:STT), said on Wednesday that Moody's outlook cut was "a terrible overreaction."
The regulators had reassured markets, O'Hanley said in a Bloomberg News interview.
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Written By: Reuters
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