Regional Banks Suffer as PacWest Plummets and Unusual Trades Emerge.

US regional banking stocks are experiencing heavy losses following the failure of First Republic Bank, with PacWest Bancorp dropping 14% in premarket trading and Western Alliance Bancorp falling 7.8%. Short interest in the SPDR S&P Regional Banking ETF has risen to 96% from 74% a week ago, adding to pressure on shares. Former Federal Reserve Bank of Dallas President Robert Kaplan has called on policymakers to pause their rate-hike campaign given the banking crisis may be far from over. The situation may be "more serious than we currently understand," he said.