Another Institution Falls Victim to the U.S. Banking Crisis: PacWest

PacWest Bancorp’s stock fell by over 20% as the bank’s deposits declined by approximately 9.5% last week. The decline occurred after news broke that PacWest Bancorp was exploring different strategic options, including a sale. The bank said that the news headlines increased its customers’ fears over the safety of their deposits. PacWest Bancorp stated that it has liquidity of over $15 billion immediately available, attempting to reassure investors. However, the US banking crisis continues, with reports suggesting that nearly half of America’s 4,800 banks are burning through their capital buffers. 2,315 banks are reportedly sitting on assets worth less than their liabilities. The seizure of First Republic Bank in May shows that the US banking crisis is far from over. Additionally, the US may default on its public debt payments by June 1 if Congress doesn’t raise the debt ceiling.