Jamie Dimon, Larry Summers and Jerome Powell have declared the end of the crisis, even as PacWest waves another potential red flag.
While prominent gurus in the financial world have declared the end of the regional banking crises after the failure for four large regional banks, depositors and shareholders of those banks don’t necessarily agree.
PacWest Bancorp PACW said Thursday it saw a 9.5% drop in deposits in the days following JPMorgan Chase’s JPM acquisition of First Republic Bank on May 1, the fourth government-brokered bank transaction this year. In the current environment, investors are still questioning the strength of the U.S.’s mid-sized banks and the ability of business and government leaders to backstop them.
Meanwhile, political and business leaders continue to work to restore faith in the banking system by declaring the worst is over after the collapse of Silicon Valley Bank and its sale to First Citizens Bancshares FCNCA , the purchase of Signature Bank by New York Community Bancorp NYCB and JPMorgan’s acquisition of First Republic. A fourth bank, Silvergate Bank, liquidated in March as well with no buyer.
But many of the circumstances around First Republic were unique to the bank and not systemic, Summers said. “This part of the crisis is over,” Dimon said on May 1 as his company aired plans to absorb First Republic Bank. “For now, let’s take a deep breath.”
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