Despite worries over bad loans at midsize U.S. banks, there’s little evidence of a systemic problem, according to a senior analyst at Moody’s Ratings.
Marc Pinto, the agency’s head of global private credit, acknowledged in a interview on CNBC’s “Squawk Box” that there are concerns over loose lending standards and some slack in the conditions that institutions attach to loans.
However, he said when looking at the system as a whole, contagion the likes that could trigger a broader financial crisis is not evident.
“When we dig deeper here and look to see if there’s a turn in the credit cycle, which is effectively what the market seems to be focusing on, we can find no evidence,” Pinto said. “Now that’s what we’re seeing today. That could always change. But if we look at the asset quality numbers that we’ve seen over the last several quarters, we’re seeing very little deterioration at all.”
Bank stocks sold off aggressively across the board Thursday after Zions and Bancorp and Western Alliance Bancorp disclosed holding bad loans related to the bankruptcies of two auto lenders. The worries have dragged down shares of investment bank Jefferies this month since it disclosed some exposure to bankrupt auto parts maker First Brands.
