(News Bulletin 247) – The American regional bank is in the sights of the markets. The PacWest title collapsed by more than 50% in after-hours trading on Wall Street on Wednesday evening.

Wall Street is looking for the next weak link in banking. And he would have found in PacWest the new source of anxiety for a market still very worried about the solidity of mid-sized banks.

The takeover of the majority of First Republic Bank’s assets by JP Morgan has not allayed fears far from it, as evidenced by the American bank’s plunge in post-market trading. PacWest has indeed dropped more than 50% Wednesday night the day after a heavy decline of 28%. This time it was a Bloomberg article that sparked the fire, according to which the regional bank was considering several strategic options, including a sale.

PacWest reacted to the information disclosed by the news agency and indicated that it was in good discussions with potential investors “Recently, the company has been approached by several partners and potential investors – discussions are ongoing,” said PacWest in its press release. “The company will continue to evaluate all options to maximize shareholder value,” the bank added.

The banking crisis “is far from over”

PacWest took advantage of this development to try to reassure the market about its financial situation in a market plagued by many doubts about its state of health. “The bank has not experienced any unusual deposit flows following the sale of First Republic Bank and the release of other industry information,” PacWest added. “Our cash and available cash remain strong and have exceeded our uninsured deposits,” the bank promises.

But for some market observers, this attempt by PacWest to allay fears about its situation is hardly convincing. For Tim Waterer, chief market analyst at KCM Trade, quoted by Bloomberg, the statements of the regional bank bring “little confidence to the market”. And he adds: “despite the efforts of Jerome Powell (the boss of the Fed, editor’s note) to calm the market, nothing suggests that the banking crisis is over.”

“Trust in a financial institution is built over decades and destroyed in days,” Pershing Square Chairman and CEO Bill Ackman said on Twitter. “As each domino falls, the next weakest bank begins to wobble,” he predicted. The exit of the activist trader therefore does not bode well for the future, as PacWest is not the only bank to be under close surveillance.

Western Alliance Bancorp lost up to 38% in aftermarket trading. The bank also said Wednesday that it had not seen any unusual deposit outflows and reaffirmed its expectation of an increase in deposits quarter over quarter.

The other regional banks Comerica and Zions Bancorp fell by more than 10% each, also battered by large withdrawals of deposits after the collapse of Silicon Valley Bank and Signature Bank in March.