By Lawrence White and Marc Jones
LONDON, March 16 (Reuters) - Banks should largely be
able to cope with "unrealised losses" on bonds and the collapse
of Silicon Valley Bank, top credit ratings agencies S&P Global
and Moody's said on Thursday, although they remained guarded on
Credit Suisse's woes.
"At this stage, we view the risks from unrealized losses as
manageable," S&P said in a report published just days after the
collapse of Silicon Valley Bank, a lender it had rated as
'investment grade' until the day it fell.
SVP's fate has largely been attributed to bond-related
losses that piled up on its books when global interest rates
surged last year, issues that have prompted questions about the
wider banking system.
Rival agency Moody's also offered its balm to the Credit
Suisse jitters, saying that while it would "act appropriately"
with the Swiss bank's rating, Europe's lenders remain in
fundamentally good health.
Having a lower proportion of their assets in bonds means
Europe's banks are less exposed to fluctuating interest rates
than their U.S. counterparts, Nick Hill, a managing director at
Moody's, told investors and reporters.
Moody’s on Tuesday had put a "negative outlook" -
effectively a downgrade warning - on the entire U.S. banking
sector, following the collapse of SVB Financial Group and
Signature Bank which had also been rated investment grade by
Fitch.
The storm has not yet passed, Moody's cautioned though.
Policymakers on both sides of the Atlantic continue to
increase rates, as seen by a further European Central Bank hike
on Thursday, following years of easy policy and that is causing
blips in the confidence which banks rely on, Hill said.
"That kind of confidence shock that we've just seen from the
U.S. is bound to have some impact," Hill said.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
EXCLUSIVE-U.S. regulator eyes Friday bids for SVB, Signature
Bank -sources Credit Suisse $54 bln lifeline offers limited respite to global
banks Yellen: Inflation remains Biden administration's top priority Banking system sound after 'decisive' actions, Yellen tells
lawmakers GRAPHIC-Bank stocks fall off a cliff GRAPHIC-Americans opt to keep their money with the banks ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting By Marc Jones and Lawrence White
Editing by Nick Zieminski)
Messaging: @ReutersLawrence))
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