US regional bank shares sink despite Fed calling banking system 'sound'

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Several U.S. regional banks tanked double digits after hours on Wednesday, despite U.S. Fed Chair Jerome Powell claiming the banking system to be “sound” and “resilient” a few hours earlier.

Powell's attempt to quell concerns about the banking sector came as he announced that the Federal Reserve would hike interest rates another 25 base points:

“Conditions in [the banking] sector have broadly improved since early March and the U.S. banking system is sound and resilient. We will continue to monitor conditions in the sector. Powell added they are"committed to learning the right lessons from this episode," and we’ll work to prevent events like these from happening again.”

 

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One such regional bank, PacWest Bancorp, fell a whopping 52.5% in after-hours trading after Bloomberg reported that the bank would explore strategic options on May 4. It has been seen by some as another bank to potentially fall amid a U.S. banking crisis.

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