US regional banks fall on Wall Street after First Republic collapse

US regional banks fall on Wall Street after First Republic collapse

U.S. regional banks fell on Wall Street on Tuesday as fears resurfaced about the health of the financial system following the collapse of First Republic Bankwhich was intervened by the authorities and partially sold to the country’s largest institution, JPMorgan Chase. At the close of trading, losses were led by PacWest, which plunged 28%, followed by Metropolitan Bank, which fell 20%, and Western Alliance, 15%.

KRE exchange-traded fund, which represents the regional bank sector, dropped 6.27% in its worst day ever. since the turmoil of March. The declines also came amid nervousness ahead of tomorrow’s conclusion of the Federal Reserve’s monetary policy meeting, in which the central bank is expected to decide to raise interest rates again, by 25 basis points.

“Wall Street Is hitting the sell button as it looks like the banking problems won’t go away soon and is ready to focus on the next weakest link, potentially a lender with a large exposure to the commercial real estate sector,” opined analyst Edward Moya of Oanda. In the early hours of Monday morning, and after a weekend of speculation, US regulators intervened First Republic Bank and reached an agreement to sell most of its operations to JPMorgan for 10.6 billion dollars (9.664 billion euros).

First Republic Bank.

First Republic’s is the third regional bank collapse in just two months in the U.S.. following those of Silicon Valley Bank and Signature Bank last March.

The entity had plunged on the stock market and had lost virtually all of its value in the past weekwhen it released its quarterly results and revealed that its customers had withdrawn more than $100 billion in deposits during the recent banking crisis. EFE

Kayleigh Williams