BRIEF-Moody's On US Banking System- Outlook Changes To Stable On Steady Asset Quality, Improving Profitability Prospects

Oct 21 (Reuters) -

* MOODY'S ON US BANKING SYSTEM- OUTLOOK CHANGES TO STABLE ON STEADY ASSET QUALITY, IMPROVING PROFITABILITY PROSPECTS

* MOODY'S ON US BANKING SYSTEM: OPERATING ENVIRONMENT SHOULD ALSO BE STABLE IN 2025, AS INFLATION DECLINES TO THE FEDERAL RESERVE'S (FED) 2% TARGET

* MOODY'S ON US BANKING SYSTEM- AS INTEREST RATES FALL, BANKS MAY LOWER LOAN LOSS RESERVES AND REAP INCREASED FEE INCOME

* MOODY'S ON US BANKING SYSTEM- STABLE OUTLOOK REFLECTS BENEFIT TO ASSET QUALITY AND PROFITABILITY FROM LOWER INTEREST RATES

* MOODY'S ON US BANKING SYSTEM: FUNDING AND LIQUIDITY WILL REMAIN BROADLY STABLE

* MOODY'S ON US BANKING SYSTEM- CAPITALIZATION LEVELS WILL REMAIN BROADLY STABLE

* MOODY'S ON US BANKING SYSTEM- INITIALLY ASSETS WILL REPRICE DOWNWARD MORE QUICKLY BUT STEEPER YIELD CURVE COULD OFFSET PRESSURE BY MID-2025

* MOODY'S ON US BANKING SYSTEM: NOVEMBER ELECTIONS & ANY CHANGES IN LEADERSHIP AMONG FEDERAL AGENCIES WILL LIKELY INFLUENCE REGULATORY ENVIRONMENT

* MOODY'S ON US BANKING SYSTEM- LARGER BANKS ARE LIKELY TO MAINTAIN HIGHER CAPITAL LEVELS ANTICIPATING A BASEL III ENDGAME REGULATORY RE-PROPOSAL

* MOODY'S ON US BANKING SYSTEM- KEY DOWNSIDE RISK IS POSSIBILITY OF ECONOMIC DOWNTURN IF INFLATION ACCELERATES & FED HAS TO TIGHTEN MONETARY POLICY

* MOODY'S ON US BANKING SYSTEM: OPERATING ENVIRONMENT SHOULD ALSO BE STABLE IN 2025, AS INFLATION DECLINES TO THE FEDERAL RESERVE'S (FED) 2% TARGET Source text for Eikon: Further company coverage: [ ]