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New blow to US banks – Downgrade by S&P

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Νεο πλorγμα στι&sigma ; αμερικανικΕς τραπεζες – Υποβαθ&mu ;ιση απτην S&P

A sharp rise in interest rates is straining the funding and liquidity of many US banks, the S& ;P in its note

The US banking industry was dealt a fresh blow as S&P Global said it was downgrading credit ratings and revising its outlook for several US banks, warning that funding risks and weaker profitability will likely test the sector's credit strength.

S&P, CNBC reports, downgraded Associated Banc-Corp and Valley National Bancorp citing funding risk and higher reliance on intermediary deposits . It also downgraded UMB Financial Corp, Comerica Bank and Keycorp, citing large deposit outflows and higher interest rates prevailing.

The sharp rise in interest rates is straining the funding and liquidity of many US banks, S& P in its note, adding that deposits held by banks insured by the Federal Deposit Insurance Corp (FDIC) will continue to decline as long as the Federal Reserve maintains “quantitative tightening.”

The rating agency also downgraded the outlook of S&T Bank and River City Bank to negative from stable.

In a similar move, Moody's had also downgraded the credit rating of ten small and medium-sized banks in the US due to the pressures, especially those with high levels of fixed

securities and loans

Source: 24h.com.cy

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