SVB-rattled banks First Republic and Western Alliance go on downgrade watch at Moody's
Former shareholders had fled the two stocks after California-basedThat crash came after it disclosed massive losses in its bond portfolio, fueling a bank run that saw major investors likeSmall-to-midsize banks like San Francisco's First Republic and Arizona-based Western Alliance have borne the brunt of the fallout from the SVB crisis so far.
Both First Republic and Western Alliance look vulnerable because a high number of their customers have deposited over $250,000 in their accounts, according to Moody's – which makes them more likely to pull their funds from the banks because there's no guarantee they'd get their money back from the Federal Deposit Insurance Corporation in case of a collapse.
Moody's also placed its bond ratings for four other regional banks – Wichita's INTRUST, Kansas City's UMB, Salt Lake City's Zions Bancorporation, and Dallas' Comerica – under review Monday. Institutions of that size are the most likely to suffer a collapse in the ongoing crisis, top economist Nouriel Roubini has warned.
"The run may continue," Roubini, who's often known as"Dr Doom" because of his bearish forecasts, told
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