Ratings agency Moody's (MCO) has downgraded its debt rating on collapsed cryptocurrency lender Signature Bank (SBNY) to “junk” and placed six other U.S. banks under review for a possible ratings downgrade.
Moody's added that it is withdrawing future ratings for Signature Bank, which was taken over by U.S. regulators on March 12.
The other banks placed under review by Moody’s for a potential ratings downgrade include First Republic Bank (FRC), Zions Bancorporation (ZION), Western Alliance Bancorp (WAL), Comerica (CMA), UMB Financial Corp, and Intrust Financial Corporation.
U.S. regulators closed Signature Bank two days after they shutdown Silicon Valley Bank (SIVB) in a development that left billions of dollars worth of deposits in limbo.
The failure of several banks in the U.S. has led to increased scrutiny of smaller regional banks in America and put pressure on their share prices.
The stocks of several regional banks fell dramatically during volatile trading on March 13. The stock of First Republic Bank, for example, plunged more than 60% before trading in the security was halted.
Moody’s own share price is down 5% in the last 12 months and trading at $285.31 U.S. per share.
