{"id":19091,"date":"2023-03-25T04:39:12","date_gmt":"2023-03-25T04:39:12","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/moodys-warns-of-potential-financial-disruption-spillover-beyond-us-banking-sector-bitcoin-news\/"},"modified":"2023-03-25T04:39:12","modified_gmt":"2023-03-25T04:39:12","slug":"moodys-warns-of-potential-financial-disruption-spillover-beyond-us-banking-sector-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/moodys-warns-of-potential-financial-disruption-spillover-beyond-us-banking-sector-bitcoin-news\/","title":{"rendered":"Moody’s Warns of Potential Financial Disruption Spillover Beyond US Banking Sector \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Roughly ten days ago, the credit agency Moody\u2019s Investors Service downgraded the U.S. banking sector from \u201cstable\u201d to \u201cnegative.\u201d In a recent update on Thursday, the company stated that there is still a risk to the U.S. economy. The managing director of credit strategy at Moody\u2019s explained that the country \u201cwill be unable to curtail the current turmoil,\u201d and it could spread \u201cbeyond the banking sector.\u201d<\/strong><\/p>\n

Moody\u2019s Analysts Anticipate Greater Financial and Economic Damage From U.S. Banking Spillover Effects<\/h2>\n

In a note sent out on Thursday, Moody\u2019s managing director of credit strategy Atsi Sheth explained<\/a> that the U.S. may not be able to contain the banking turmoil that started two weeks ago. The commentary follows Moody\u2019s recent downgrade<\/a> of the U.S. banking industry, which was slashed from \u201cstable\u201d to \u201cnegative.\u201d The credit agency applied the downgrade after three major U.S. banks collapsed, and the contagion spread to other U.S. banks and a few international financial institutions.<\/p>\n

\u201cThe risk of the financial disruption spilling over could unleash greater financial and economic damage than we anticipated,\u201d Moody\u2019s analysts wrote. According to Moody\u2019s, banks are not the only financial institutions that can be hurt by the Federal Reserve\u2019s consistent rate hikes<\/a>. \u201cMarket scrutiny will focus on those entities that are exposed to similar risks as the troubled banks,\u201d Moody\u2019s explains.<\/p>\n

The credit agency added:<\/p>\n

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[U.S. officials] will be unable to curtail the current turmoil without longer-lasting and potentially severe repercussions within and beyond the banking sector.<\/p>\n<\/blockquote>\n

The note from Moody\u2019s credit analysts is similar to the warning<\/a> Fitch Ratings gave last week, which explained that other types of non-bank-related institutions could feel the \u201cknock-on effects\u201d of the banking contagion. Last October, Fitch Ratings predicted<\/a> a U.S. recession would happen in the spring of 2023. Moody\u2019s analysts envision constrained growth this year.<\/p>\n

\u201cOver the course of 2023, as financial conditions remain tight and growth slows, a range of sectors and entities with existing credit challenges will face risks to their credit profiles,\u201d Moody\u2019s analysts led by Sheth concluded on Thursday.<\/p>\n

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Atsi Sheth<\/a>, banking contagion<\/a>, commentary<\/a>, Credit Agency<\/a>, credit challenges<\/a>, credit profiles<\/a>, credit strategy<\/a>, economic damage<\/a>, entities<\/a>, existing credit<\/a>, Federal Reserve<\/a>, financial and economic impacts<\/a>, financial conditions<\/a>, financial disruption<\/a>, Financial Institutions<\/a>, Fitch Ratings<\/a>, greater risks<\/a>, growth<\/a>, knock-on effects<\/a>, managing director<\/a>, market scrutiny<\/a>, mitigation strategies<\/a>, Moody’s<\/a>, non-bank-related<\/a>, potential spillover<\/a>, rate hikes<\/a>, risks<\/a>, sectors<\/a>, spillover effects<\/a>, troubled banks<\/a>, US banking sector<\/a><\/div>\n<\/div>\n

What do you think should be done to mitigate the risks of the potential spillover effects of the U.S. banking sector\u2019s turmoil on other financial institutions? Share your thoughts in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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