First modification:
The shares of some medium and small banks on the New York Stock Exchange fell drastically on Tuesday, May 2, one day after JP Morgan bought almost all the assets of First Republic Bank.
The New York Stock Exchange suspended First Republic Bank’s listing on Tuesday and began the process to remove its name from the list of publicly traded companies, a necessary step after the collapsed bank was seized a day earlier by the authorities and sold to JPMorgan Chase.
The First Republic share has accumulated a depreciation of more than 97% since the beginning of March, when two medium-sized banks collapsed: Silicon Valley Bank and Signature Bank.
JPMorgan Chase agreed on Monday May 1 to acquire most of First Republic’s assets in a $10.6 billion deal after it was seized by regulators.
This new chapter in the crisis of confidence in a segment of the US financial sector ended up affecting the behavior of the shares of other banks, especially small and medium-sized ones.
The fall spread to other banks
Pacwest, which ranks 53rd in the US bank by asset level, lost more than 27% on the day. Losses were also posted, albeit smaller, at banks such as Western Alliance, ranked 40th, KeyCorp, 20th on the list, as well as Comerica and Synovus.
Valley National Bankcorp, owner of Passaic, New Jersey-based Valley National Bank and the No. 43 lender with $57 billion in assets, closed down 3% after losing more than 20% on Monday.
The Federal Reserve is expected to comment on the regional banking turmoil at the end of its Federal Open Markets Committee meeting on Wednesday, with markets expecting a 25 basis point interest rate hike.
With Reuters and EFE
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