U.S. regional bank stocks fall in skittish trading

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Shares of major U.S. regional lenders erased premarket gains in the early hours of trading on Friday, underscoring the sector's volatile status quo as worries of a deepening banking crisis rattled investors.

also dipped. The bank's stock had ticked down just 0.8% on Thursday, less than other industry peers, after it said total deposits jumped $600 million in the week to May 9.was an outlier, recovering 1% a day after the lender lost over a fifth of its market value.that its deposits declined last week and it posted $5.1 billion more in collateral to the U.S. Federal Reserve to boost its liquidity.

"More U.S. banks have been in the market crosshairs... despite many of the pressured banks having generally solid credit fundamentals," DBRS Morningstar analysts said. "In our view, these fears are likely to persist until U.S. authorities revamp deposit insurance or place a temporary prohibition on short-selling."

Persistent worries about sector instability, worsened by the collapse of First Republic Bank earlier in May, have pushed down the KBW Regional Banking indexRetail traders looking to buy the dip bet aggressively on the sector during the bigger selloffs on May 2 and May 4, but had lost nearly 33% of their investments as of May 10, according to a report from Vanda Research.on Thursday it will charge lenders with a special assessment fee of 0.125% on uninsured deposits in excess of $5 billion.

The pace of such "cash realignment" has slowed for three straight months and will abate during 2023, it added.

 

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