All articles tagged with #midsize banks
PacWest Bancorp's stock fell 23% after the bank disclosed losing 9.5% of its total deposits last week in a securities filing, causing volatile trading and dragging down other midsize banks in the stock market.
Federal banking regulators will release recommendations on Friday for how rules should change for midsize institutions to prevent a repeat of last month’s meltdown. The announcements will also report on what went wrong after the implosion of two banks spurred two weeks of economic panic and forced an emergency government intervention in March. The Federal Reserve will unveil its probe of Silicon Valley Bank, and the Federal Deposit Insurance Corporation will put out its findings around Signature, to be followed on Monday with a report on whether the rules governing deposit insurance should change. The Fed’s report is expected to include proposals that would strengthen rules on banks with over $100 billion in assets, likely through stronger capital and liquidity requirements.
A coalition of midsize US banks is urging the government to insure all deposits for the next two years to help smaller banks navigate the current banking crisis. The FDIC currently insures deposits up to $250,000, but the recent decision to protect Silicon Valley Bank and Signature Bank depositors suggests a broader willingness to back customer funds. Tesla CEO Elon Musk endorsed the idea on Twitter, saying it was needed to "stop bank runs." The Mid-Size Bank Coalition of America sent a letter to regulators, and California Democratic Rep. Ro Khanna is preparing to introduce legislation that removes the agency's coverage cap.
Bank stocks have lost a quarter-century worth of gains, raising concerns about deposit risks and caution among investors, particularly on midsize banks. Money managers are divided on whether this is a buying opportunity for contrarian investors or a sign that the group is broken. Alger's director of market strategy, Brad Neuman, believes there's not a great place for regional banks in portfolios now.
The Federal Reserve is considering tougher capital and liquidity requirements and annual stress tests for midsize banks following the collapse of two lenders, which could extend restrictions that currently only apply to the biggest Wall Street firms.