Moody's: SVB collapse unlikely to spread to emerging markets

Fallout 'to be modest'

There is little risk of contagion from the ongoing US regional bank crisis onto emerging market banks, according to new research from Moody’s Investors Service.

Due to a lack of exposure to distressed US regional banks, along with structural funding strengths and liquidity buffers, Moody's remained positive on the sector. "We expect the direct negative impact on EM banks to be modest and mainly manifest itself through second-order effects, such as volatility in domestic financial assets and currencies, and tightening in funding and credit conditions," the analysts said. The note, released today (17 March), analysed the risks to G20 emerging market banks, namely those in Argentina, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South A...