There’s good news for regional banks as they bounced back after a day of heavy selling. First Republic, one of the names in the SPDR S&P Regional Banking ETF (KRE), was up 36% for the session. Other regional banks also saw gains with PacWest up 44%, KeyCorp up 11%, and Western Alliance up 20%. Charles Schwab also rebounded by climbing 11% after a 12% drop on Monday.
On Monday, regional banks had taken a hit despite U. S. regulators taking extraordinary measures to backstop depositors in the now-failed Silicon Valley Bank. First Republic, in particular, fell 61.8%. But good news! Confident statements from finance execs caused Tuesday’s rally with Charles Schwab’s CEO reporting significant inflows and KeyCorp’s CEO stating the bank hadn’t seen significant deposit outflows in recent days, and was instead getting cash inflows from retail customers.
Federal regulators are also doing their part to stabilize the banking system with one announcement being the Fed’s Bank Term Funding Program. This program will allow banks to get cash without booking mark-to-market losses.