Breaking: Banking Crisis 2.0; PacWest Stock Price Dumps By 27%

Crypto News: Shares of PacWest Bank have been on Monday halted for trading multiple times on Monday over news of potential buyout by Banc of California. The PacWest stock price dropped by 27% over this development, bringing back fears of more uncertainty around banking stocks in the United States, reminiscent of the US regional banking crisis that hit earlier in the year. The crisis led to customers rushing to withdraw deposits, and subsequently the closure of the Silicon Valley Bank, Signature Bank and First Republic Bank. Meanwhile, it remains to be seen if a similar environment will eventually repeat and have a ripple effect on the crypto market.

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On Tuesday, the Dow Jones U.S. Banks Index dropped by 1.28% as a result of the PacWest news. Meanwhile, it remains to be seen if the Bitcoin price could be impacted if the fear and uncertainty around the bank merger goes full blown. On the other side, the market is expecting a 25 bps interest rate hike decision from the US Federal Reserve on Wednesday, while the traders will be looking for comments around further rate hikes in Fed Chair Jerome Powell’s press conference.

Banc Of California To Buy PacWest

According to The Wall Street Journal, Banc of California is in advanced talks to buy the PacWest Bank and the deal could be closed by the end of the day on Tuesday. Meanwhile, the Banc of California stock price rose by 11% on Tuesday. Among the most impacted banks due to the regional banking crisis in the United States was PacWest, which was at one stage touted as the next bank in line to collapse after the collapse of three regional banks.

Earlier in May 2023, US Treasury Secretary Janet Yellen warned that there was a need for mergers between mid size banks to improve the financial health of the institutions.

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