Goldman Sachs on Wednesday cut its forecast for fourth-quarter US gross domestic product growth, citing risks to lending, while smaller banks shrink their loan portfolios to conserve liquidity in the face of a banking crisis.
Analysts at the bank now expect year-on-year growth of 1.2 percent for the fourth quarter, down 0.3 percent from the previous estimate.
Regional banks in the United States are facing tough times since regulators shut down Silicon Valley Financial Group after a massive deposit drive last week.
And the acceleration of events at Silicon Valley Bank, which lends to start-ups, has fueled fears of possible deposit withdrawals in other banks that may cause banks to rush to obtain funds to cover deposit requests.
Goldman Sachs said that anxiety in some banks persists, despite the federal government’s decisive action to strengthen the financial system.
On Tuesday, Moody’s revised its outlook on the state of the US banking sector to “negative” from “stable”.
(Archyde.com)