Regional Bank Stocks, Including PacWest and Western Alliance, Continue to Plummet Amid Market Uncertainty

Shares of US regional banks PacWest Bancorp and Western Alliance Bank fell as the demise of First Republic Bank triggered investor concerns about the financial health of other mid-sized lenders. The KBW Regional Banking Index fell 5.52%, hitting its lowest since December 2020. Investors fear the latest turmoil could spread to other regional banks. The exposure of regional banks to the commercial real estate sector, particularly office buildings that currently have high vacancy rates, has further heightened investor concerns that loan losses could pile up and exacerbate the current crisis amid rising interest rates.