Regulators step in after PacWest and Western Alliance shares plunge as investors fear repeat of First Republic, SVB and Signature failures
US banks are failing, and the authorities seem unlikely to intervene
Dominic Rushe, Julia Kollewe and Lois Beckett in Los Angeles
Thu 4 May 2023 17.23 EDT
Trading in the shares of two more regional US lenders was temporarily suspended on Thursday amid a widening crisis for the country’s mid-sized banks.
Regulators stepped in to halt trading in the Los Angeles-based PacWest and Arizona’s Western Alliance following dramatic drops in their share prices.
It came after another mid-sized bank, First Republic, was sold to JP Morgan earlier this week. Depositors had pulled $100bn from First Republic, fearing their money was no longer safe.
PacWest had sought to calm markets on Wednesday and said it was in talks with several potential investors after its shares fell by as much as 60%. But the sell-off continued on Thursday and affected other regional banks.
Shares in PacWest fell 50% on Thursday after Bloomberg News reported that the lender was considering strategic options, including a sale or a fundraising round.
The bank sought to reassure investors by saying it had not experienced unusual deposit flows. “Recently, the company has been approached by several potential partners and investors – discussions are ongoing,” it added.
Western Alliance’s share price plummeted 45% after the Financial Times reported it was exploring strategic options, including a potential sale, which the bank strongly denied. It called the story “absolutely false” and said it had not experienced unusual deposit flows after the sale of First Republic. Its shares ended Thursday down 38%.
https://www.theguardian.com/business/2023/may/04/shares-in-california-lender-pacwest-plummet-amid-fears-of-new-us-banking-crisis
