USA Today, a daily newspaper in the United States, reported on the 4th (local time) that a total of 190 banks are likely to go bankrupt as the financial crisis caused by provincial banks in the United States continues.
Since Silicon Valley Bank (SVB) went bankrupt in March, First Republic Bank’s bankruptcy last week has brought three provincial banks to bankruptcy in the United States. This means that 187 more banks could fail in the future.
USA Today predicted that this level of bankruptcy would be inevitable as many banks have large uninsured deposits.
The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000. However, beyond this, there is no guarantee.
But many U.S. banks have deposit accounts of $250,000 or more. As a result, USA Today predicted that additional bankruptcies would be inevitable.
Packwest Daily Stock Trends – Captured from Yahoo FinanceOn this day, the US stock market fell all at once as the banking crisis erupted again. The epicenter of this crisis was Pac West Bancorp. As the bank’s share price plummeted by more than 50%, other regional banks also plummeted.
Headquartered in Los Angeles, the bank has approximately 70 branches in California, North Carolina and Colorado, and has assets of $44 billion.
Shares plummeted after Bloomberg News reported that “PacWest is considering various strategic options, including a sale.” On this day, PacWest recorded $3.17, down 50.62% from the previous trading day.
As PacWest plummeted, other provincial banks also plummeted. Western Alliance fell 38.45%, Zion 12.05%, and Signature Bank 11.01% each. As a result, the S&P 500 Regional Bank Index plunged more than 5%.
As provincial bank stocks plummeted, stocks of large global banks also suffered. Citigroup fell 1.69%, Bank of America 3.12%, Wells Fargo 4.25% and Goldman Sachs 2.25%. As a result, the S&P 500 banking index plunged 2.82%.
As banking stocks plummeted all at once, the US stock market also closed lower all at once. The Dow fell 0.86%, the S&P 500 0.72% and the Nasdaq 0.49%.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.