Banking 'turmoil' can't be contained

3.24.23 - Banking 'turmoil' can't be contained

Gold last traded at $1,978 an ounce. Silver at $23.12 an ounce.

Moody's sees risk that U.S. banking 'turmoil' can't be contained- MarketWatch

Still, the agency's baseline view is that U.S. officials will "broadly succeed".

Despite quick action by regulators and policy makers, there's a rising risk that banking-system stress will spill over into other sectors and the U.S. economy, "unleashing greater financial and economic damage than we anticipated," said Moody's Investors Service, one of the Big Three credit-ratings firms. Simply put, the risk is that officials "will be unable to curtail the current turmoil without longer-lasting and potentially severe repercussions within and beyond the banking sector," Atsi Sheth, Moody's managing director of credit strategy, and others wrote in a note distributed on Thursday. Still, the agency's baseline view is that U.S. officials will "broadly succeed." Moody's warning came as Treasury Secretary Janet Yellen indicated that the U.S. could take additional actions if needed to stabilize the banking system, and after Federal Reserve Chairman Jerome Powell assured Americans on Wednesday that the central bank would use its tools to protect depositors. Read: Regional banks get the attention, but worries are more widespread, says ex-FDIC chief Bair and Debate over expanding deposit insurance weighs on bank stocks. Here's what to know.