The banking crisis risks severe spillover across the financial sector and beyond, Moody's says

• Moody's expects the bank crisis to be contained by the actions from policymakers.
• But there's still a risk it produces spillover effects that go beyond the bank sector, it added. 
• If that happens, the result would be greater financial and economic damage, the ratings agency said.

Fallout from the bank turmoil that began with Silicon Valley Bank earlier this month still carries the risk of spilling over, even though policymakers responded quickly to the crisis, according to Moody's. 

In a Thursday note, strategists from the ratings agency said they broadly expect the Federal Reserve and other regulators to be successful in containing ripple effects, but the potential for broader stress remains.