Hope you're still buckled...

Moody's Investors Service just cut its outlook on the entire U.S. banking system from "stable" to "negative" in the wake of several major bank failures.

In their report, Moody's wrote that it made the move to "reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY."

In addition to the downgrade of the entire sector, Moody's warned of six individual institutions which were placed on review for potential downgrades:

• First Republic
• INTRUST Financial
• UMB
• Zions Bancorp
• Western Alliance
• Comerica

Moody's made note all the steps the Fed, Treasury, and FDIC have taken in their non-bailout bailout, yet relayed that widespread concerns still exist as banks with losses and uninsured depositors could still be at risk. Indeed, this was reflected in the market yesterday as smaller bank stocks were ground into dust.

"Banks with substantial unrealized securities losses and with non-retail and uninsured US depositors may still be more sensitive to depositor competition or ultimate flight, with adverse effects on funding, liquidity, earnings and capital," the report said.

"We expect pressures to persist and be exacerbated by ongoing monetary policy tightening, with interest rates likely to remain higher for longer until inflation returns to within the Fed's target range," Moody's said. "US banks also now are facing sharply rising deposit costs after years of low funding costs, which will reduce earnings at banks, particularly those with a greater proportion of fixed-rate assets."