Regional bank stocks soar: Is the US banking crisis ending soon?
First Republic bank
US regional bank stocks soared on Wednesday after Western Alliance Bancorp reported a deposit growth of over $2 billion since April.
Earlier in the year, the US banking system, especially its regional banks, came under pressure after the collapse of the Silicon Valley Bank, Signature First Bank and First Republic Bank.
Many analysts say it is too soon to call an end to the banking crisis. But the strong recovery in the US banking stocks indicate that worries about the health of US regional lenders are definitely easing.
The stocks of the most vulnerable regional US banks have risen sharply.
Shares of Western Alliance and Pacific West Bancorp were up over 21 percent for the week.
The KBW regional banking index, which reflects the performance of US companies that do business as regional banks, gained more than 7.5 percent.
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But the latest rally has done little to ease the banking industry's suffering.
Western Alliance is down about 41 percent so far this year, and PacWest has tumbled 76 percent.
The KBW regional banking index has mirrored those losses, with about 26 percent knocked off the index in 2023.
Heads of collapsed banks blame social media
In a parallel development, heads of failed US banks mostly blame social media and not themselves, Bloomberg reported on Wednesday.
The senior executives at recently collapsed banks, facing a second day of grilling from the US legislators, said social media was the root cause for their dramatic crashes.
First Republic Bank was sold to JPMorgan Chase in a government-mediated sale. The chief of the failed bank, Michael Roffler, said: "The panic was very real" and refused to take the blame.
Signature Bank chairman Scott Shay said panic was "flooding through social media" before his bank was seized.
Meanwhile, former SVB CEO Greg Becker said the role social media plays in the financial system is "something that needs to be looked into."
US lawmakers, though, blamed the executives for mismanaging risks. Ayanna Pressley, a Democrat who represents a district in Massachusetts, said, "You blame social media; you say similar banks experienced the same thing, so it was not your fault for what happened ultimately."
"The bank failed on your watch — period," she added.
(With agency inputs)