The capitalization of US regional banks plummeted after the collapse of First Republic Bank. During the trading day on the stock exchange, the values of PacWest, Western Alliance, Metropolitan Bank fell between 15% and 28%. The US Regional Banks Index fell to its lowest level since 2020.
After the news of the First Republic Bank collapse, the shares of several regional US banks plunged, writes The Wall Street Journal.
On May 1, First Republic Bank came under the control of the federal deposit insurance corporation. This was preceded by a sharp drop in the value of the bank’s shares: in a few days they almost depreciated. Panic among investors was caused by the bank’s report, in which it announced an outflow of deposits in the amount of $72 billion.
Immediately after the collapse of the First Republic Bank, the share price of other regional banks began to fall sharply. During trading on May 2, PacWest stocks fell 28%, Metropolitan Bank 20%, Western Alliance 15%.
The American banking crisis began after the collapse of Silicon Valley Bank. The event marked the largest bankruptcy of a credit institution in the United States since 2008.
Author:
Kirill Bilyk
Source: RB
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