- Meanwhile, PacWest Bancorp’s stock price dropped by about 48% on Thursday.
- The bank denied allegations that Western Alliance was looking into selling.
On Thursday, Western Alliance Bank, the latest bank to be alleged to be approaching collapse amid mounting pressure on the US banking system, released a statement.
Bank executives denied seeking buyers and claimed they had no plans to employ an outside consultant to evaluate strategic alternatives. The announcement was made on a day when the bank’s stock dropped by 39%, adding to the previous day’s losses. Earlier rumors had it looking for a buyer.
Meanwhile, PacWest Bancorp’s stock price dropped by about 48% on Thursday, leading many to believe that it, too, is likely facing collapse.
Banking Crisis Continues
The bank denied allegations that Western Alliance was looking into selling, saying it had no plans to do so. ‘Absolutely false’ were claims that the bank was considering a sale, according to the statement. However, after a report in the Financial Times indicated that Western Alliance was considering a sale, the stock price dropped and the bank is now among the worst performers among US regional banks.
Since March 2023, several regional banks in the United States have failed, including Silvergate Bank, Silicon Valley Bank, and First Republic Bank. After the worst week for US banks since 2008, investors are running away from smaller lenders they perceive to be next in line to fail. The US Treasury has said that it is “closely” watching the situation.
Investors are now bracing for more financial institutions to have difficulties as they face pressure to raise deposit rates in tandem with the increase in interest rates. Higher rates are reducing the value of their assets because of the reduced interest they generate.
The crypto market, however, seems to be trading in green amid the banking crisis and recent Fed interest rate decision. Bitcoin has reclaimed the $29k level and Ethereum is trading around $1900 mark.
