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Anxiety knocks regional banks, shares slump
Anxiety about a rush of withdrawals by customers of regional banks continues to roil the financial sector as PacWest Bancorp attempted to calm investors investors overnight with its shares plunged 45%.
Business
Anxiety over the potential for a rush of withdrawals by customers of regional banks continues to roil the financial sector as PacWest Bancorp attempted to calm investors investors overnight with its shares plunging 45%.
PacWest said early Thursday that it has been approached by several potential partners and investors about a deal and that talks are ongoing. It said that it has not experienced out-of-the-ordinary deposit flows following the failure and sale of First Republic Bank after a modern day bank run.
The anxiety over stability and the potential for contagion wracked other regional banks early Thursday.
Zions Bancorp slumped more than 10%, Comerica fell 7%, and KeyCorp fell 5%.
TD Bank Group and First Horizon Corp. on Thursday said they've called off a planned merger, citing regulatory hurdles. Toronto-Dominion Bank said in February that it was buying regional bank First Horizon in a $13.4 billion all-cash deal.
Shares of First Horizon plunged 46% before the opening bell Thursday.
A number of banks have been knocked off balance by recent actions by the Federal Reserve in its fight against inflation. The Federal Reserve on Wednesday raised its key interest rate by a quarter-point to the highest level in 16 years as part of that campaign, its tenth consecutive rate hike.
Chair Jerome Powell said the Fed would monitor several factors, including the turmoil in the banking sector.
The Fed chair stressed his belief that the collapse of three large banks in the past six weeks will likely cause other banks to tighten lending, and that would help the Fed in its inflation fight.