WAL - Bank stocks tumble as Janet Yellen calls for more mergers - report
2023-05-19 12:03:20 ET
Shares of regional and commercial banks tumbled in Friday early afternoon trading after Treasury Secretary Janet Yellen laid out the potential need for additional bank mergers, CNN reported Friday, citing people familiar with the matter.
The SPDR S&P Regional Banking ETF ( NYSEARCA: KRE ) slid 2.7% to an intraday low, with PacWest Bancorp ( NASDAQ: PACW ) and Western Alliance ( NYSE: WAL ) shedding over 5% . the Financial Select SPDR Fund ETF ( NYSEARCA: XLF ) also fell 0.5% .
Bank stocks have rebounded in recent days after some positive deposit-related developments, but Yellen's remarks to CEOs of the largest U.S. banks Thursday reminded investors that the tumult in the sector have yet to end.
She also told them that a potential U.S. default would reverberate beyond the financial system and emphasized that the early June X-date is real. On the same day, House Speaker Kevin McCarthy said a debt-ceiling deal could be reached as soon as this weekend with a House vote next week. But talks hit a roadblock as Republican negotiators were said to have abruptly left a Friday meeting with White House representatives.
Bank “consolidation is inevitable,” Raymond James analyst Ed Mills told CNN . “The progressive backlash is the Catch-22.”
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Bank stocks tumble as Janet Yellen calls for more mergers - report