US Regional Bank Shares Plummet Despite Fed Calling Banking System Sound
• US regional bank shares plummeted afterhours despite Federal Reserve Chairman Jerome Powell calling the banking system ‘sound’ and ‘resilient’.
• PacWest Bancorp was the hardest hit, falling over 50% as it explored strategic options for a potential sale or capital raising.
• Other banks following suit included Western Alliance Bancorp, Metropolitan Bank and HomeStreet.
U.S Regional Bank Shares Drop After-Hours
Despite Federal Reserve Chairman Jerome Powell calling the U.S banking sector “sound” and “resilient”, several regional banks took a hit in after-hours trading on May 3.
PacWest Bancorp Hardest Hit
PacWest Bancorp was the hardest hit of all regional banks, dropping 52.5% in after-hours trading due to reported plans to explore strategic options such as a potential sale or capital raising.
Other Banks Follow Suit
Western Alliance Bancorp (22.4%), Metropolitan Bank (16.2%) and HomeStreet (7.8%) were some of the other hardest-hit regional banks at the time of trading. Both Western Alliance Bancorp and Metropolitan Bank have previously integrated blockchain payment solutions for their customers from their digital asset branches, while Metropolitan Bank has since discontinued its digital asset vertical in January due to concerns about how the cryptocurrency industry was developing at that time..
Powell’s Statement
Just hours before these stocks dropped, Powell stated that conditions in this sector had generally improved since early March, reassuring investors that the Fed would continue to monitor conditions in order to prevent similar events from happening again. The chairman also announced that interest rates would be hiked by 25 basis points further affirming his confidence in the banking system’s resilience during this period of turmoil caused by First Republic Bank’s collapse – which is now considered as one of America’s biggest banking failures yet recorded..
Crypto Gaining Momentum?
The drop in U.S regional bank stocks is possibly indicative of investors turning towards alternative forms of investment such as cryptocurrencies instead – with many major coins such as Bitcoin having seen huge gains throughout 2021 so far (with no signs of stopping). With news like this emerging every day it may not be too long until crypto becomes more widely accepted within mainstream finance than ever before!
