Global banks rattled after Moody's cuts, Italy windfall tax

U.S. DEPOSIT STRESSreports last month, several big U.S. banks reported a jump in profits boosted by higher rates, but also warned of risks with U.S. consumers spending less and loan growth expected to slow.

Deposits, which have been a pressure point for banks since Silicon Valley Bank failed earlier this year, are also expected to decline further as high rates prompt customers to look for alternatives that provide higher yields. "Although the general drain on deposit funding caused by quantitative tightening moderated in Q2, there remains a significant risk that systemwide deposits will resume their decline in coming quarters," Moody's wrote in its note dated Monday."Our view on the broader sector still remains constructive," said Georgios Leontaris, chief investment officer for Switzerland and EMEA at HSBC Global Private Banking and Wealth.

"In recent weeks, we have upgraded our view on U.S. banks to a neutral positive. We've seen that earnings have done relatively okay, we've been looking at the resilience in broader U.S. macroeconomic developments coupled with what we expect is the terminal rate in the U.S. being quite close." Reporting by Niket Nishant, Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru and Lananh Nguyen in New York; Editing by Shounak Dasgupta and Saumyadeb ChakrabartyNiket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry.

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