Moody's Downgrades US Banks Amid Growing Strains

Moody's has downgraded credit ratings for 10 small and midsize US banks and warned of potential downgrades for major lenders, including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp., due to mounting funding costs and risks associated with commercial real estate loans amid weakening demand for office space. Rising interest rates are increasing the cost of funding for banks, eroding their asset values and making it harder for commercial real estate borrowers to refinance their debts. Moody's also highlighted potential regulatory capital weaknesses and declining profitability as factors contributing to the review.