Bank and Market Update

BOSTON, MA, March 14, 2023  —  After several years of stability in the banking industry, two large banks were taken over by the FDIC—Silicon Valley Bank (SVB) on March 10 and Signature Bank on March 12, representing the second and third largest U.S. bank failures, respectively, following Washington Mutual in 2008. These events are not an indication of a systemic issue in banking but rather targeted to a concentrated group of organizations. The U.S. banking system, as a whole, is strong despite recent developments.

The failure of SVB followed Moody’s downgrade of SVB Financial Group rating Wednesday, March 8, from A3 to Baa1 and S&P followed on March 9, with a downgrade from BBB to BBB-. Both rating agencies changed the credit outlook to negative from stable. Moody’s cited the bank’s deteriorating funding, liquidity, and profitability which prompted SVB to restructure its balance sheet. 

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