Regional Banks Scramble.
“A cluster of regional banks scrambled on Thursday to convince the public of their financial soundness, even as their stock prices plunged and investors took bets on which might be the next to fall.
The tumult brought questions about the future of the lenders to the fore, suggesting a new phase in the crisis that began two months ago with the collapse of Silicon Valley Bank and Signature Bank, and was punctuated on Monday by the seizure and sale of First Republic Bank.
PacWest and Western Alliance were in the eye of the storm, despite the companies’ protestations that their finances were solid. PacWest’s shares lost 50 percent of their value on Thursday and Western Alliance fell 38 percent. Other midsize banks, including Zions and Comerica, also posted double-digit percentage declines.”
The 2008 financial crisis is fresh in the minds of the public and regulators as the latest banking crisis has everyone reverting to the worst possible scenario. Some of the smaller banks are in a bind with the rising interest rates that have squeezed their books to the point of collapse and now the Fed is trying to thwart what some think could be another full bank crises that requires massive bailouts. As the 2024 election cycle approaches that is the last thing the Biden Administration wants to see happen.
