Western Alliance's Deposit Growth Sparks Rally in Regional Bank Stocks
Shares of US regional banks surged after Western Alliance Bancorp reported strong deposit growth, indicating that customers remained confident of its financial health despite recent failures of other regional lenders. The KBW Regional Banking Index rose 7.3%, reaching its highest level since May 1. While the earnings environment for regional banks will still be impaired, the period of emergency seems to be dissipating and there's more focus on the fundamentals. Regulators need to work together with the regional banking industry to find policy options that will help bring back consumer confidence and stability to the financial system.