PacWest Bancorp faced a sharp decline in its stock on Thursday, its shares having lost 20% compared to Wednesday's closing price. This came in response to the bank's filing to the Securities and Exchange Commission (SEC), in which it declared that its deposits had decreased by 9.5% in the week ended May 5, 2023.
Although the bank tried to post-boast investor confidence by claiming that it had liquidity worth over 15 billion available to them presently, the news happened to break amid reports that the bank was exploring various strategic options, most prominently the sale.
This incident only serves to add further to the U.S. banking crisis, which began with the collapse of Silicon Valley Bank, Silvergate, and Signature Bank in March. Moreover, news of First Republic Bank's takeover earlier this month highlights how the crisis is far from being stabilized.
Reports suggest that half of the total 4,800 U.S. banks have begun burning through their capital buffer, with 2,315 of them have assets lesser than the value of their liabilities. This crisis has been compounded by the current situation, where the U.S. might end up defaulting on its public debt payments by as soon as June 1 unless Congress quickly passes a measure to raise the debt ceiling.
Lucy Clark
- 2023-05-11
PacWest Bancorp Facing Dire Consequences of US Banking Crisis
PacWest Bancorp faced a sharp decline in its stock on Thursday, with its shares having lost 20% compared to Wednesday's closing price due to the filing of a decrease in deposits by 9.5% to the SEC. Reports suggest that the US banking crisis is far from being stabilized, with half of US banks burning through capital buffers.
