Turmoil that’s engulfed Bank Stocks
The turmoil that’s engulfed bank stocks deepened Monday as investors rushed to reduce exposure to the industry, triggering a cascade of trading halts as multiple lenders suffered record drops.
Regional banks were among the hardest hit with the KBW Regional Banking Index sinking by as much as 12%, its sharpest intraday plunge since March 2020. The rapid selloff comes even as the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said they were introducing a new backstop for banks that would be large enough to protect the entire nation’s deposits.
“Most banks are solvent under normal circumstances. The problem is, pretty much no bank can withstand a full bank run,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “The FDIC action removes the idea of a deposit bank run, but what we’re seeing is an investor bank run,” he added.
First Republic Bank sank 79% for a record drop, sparking multiple halts for volatility
Western Alliance Bancorp lost 85%, its biggest drop ever
PacWest Bancorp was down 60%, hitting a record low
Among other regional banks sinking more than 20% on Monday and triggering halts: Customers Bancorp Inc., Comerica Inc., Zions Bancorporation, East West Bancorp and Bank of Hawaii
Many large US banks also churning lower, with Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. all slumping 3% or more on Monday.
Credit to : Bloomberg
