Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’

In a harsh blow to an already-reeling sector, Moody’s Investors Service on Monday cut its view on the entire banking system to negative from stable.

The firm, part of the big three rating services, said it was making the move in light of three key failures that prompted regulators to step in Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis.

“We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in a report.

The move followed action late Monday when Moody’s warned that it either was downgraded or placing on review for downgrade seven individual institutions.

This is breaking news. Please check back for updates.