Moody`s: Outlook for US banks raised to `Stable`

Moody`s Investors Service has raised its outlook for the US banking industry for the first time in five years, citing the improving economy and banks` stronger balance sheets.

The rating agency said in a report issued Tuesday that sustained economic growth and a better jobs picture will help banks over the next 12 to 18 months. Moody`s raised its outlook for the industry to "Stable" from "Negative." It had been "Negative" since 2008, the year the financial crisis struck.

Moody`s said that after a year of reducing losses from soured loans and building cushions against losses, banks are in a better position to handle any future economic downturn.

It said the most likely scenario pushing the outlook back to negative would be a slackening of banks` credit standards.