Regional Bank Shares Plunge on Fear of More Rescues to Come
- Fourth bank collapse spotlights sector’s enduring frailties
- FDIC hasn’t expanded deposit insurance, despite industry pleas
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PacWest Bancorp and Western Alliance Bancorp led a deep selloff in regional lenders Tuesday, as renewed fears over the health of the financial system hit Wall Street after the second-largest US bank failure ever.
Trading in both firms triggered multiple volatility halts as PacWest fell 28% to close at a record low while Western Alliance tumbled 15%. The pair has shed more than $5 billion in market value so far this year. The KBW Regional Banking Index dropped 5.5% on Tuesday, the most since the crisis that engulfed Silicon Valley Bank in March.