In normal times, those numbers might have alleviated investors’ fears, Moya said. “Our cash and available liquidity remains solid and exceeded our uninsured deposits, representing 188%.” “The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news,” it said.
PacWest reported Thursday that withdrawals had slowed and that 75% of its deposits were insured and the bank remained flush with cash. While this latest crop of regional banks bears some similarities to the three that failed this year, they don’t appear to have the same reliance on uninsured deposits that got the others in trouble. Similarly, southeastern regional bank First Horizon was teetering, having scrapped a $13 billion merger with Canada’s TD bank. It was still down 33% midday in New York, and has lost more than 65% of its value this year. The Arizona lender denied the report, helping its stock pare some losses. Western Alliance was also flagging Thursday after the Financial Times reported that the bank was exploring a sale. How a Main Street bank run infects Wall StreetĪfter First Republic on Monday became the third US lender to fail this year, investors shifted their angst toward PacWest Bancorp, yet another regional California lender, whose share price was cut in half Thursday after it confirmed it was “exploring strategic options” (read: seeking a buyer, stat). “This contagion fear has not eased up whatsoever.” “We’re seeing a lot of concern here that something’s about to break,” Ed Moya, a senior market analyst with Oanda, told me. Seven weeks later, despite the government’s intervention to backstop depositors and extend credit to banks, the panic has taken root on Wall Street, which is now feeding on its own anxiety. Here’s the deal: When Silicon Valley Bank crumbled on March 10, it was a Main Street problem - scared depositors rushed to pull out their money, and the bank ran out of cash.
Wall Street: “Everybody sell, the banks are on fire!” A summary of where things stand in the banking crisis:
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