Shares of First Republic Bank, a financial institution in the United States that does business with startups, are rebounding today after a punishing start to the trading week.
Caught in the wake of the shock collapse of erstwhile rival Silicon Valley Bank, shares of First Republic fell 62% yesterday. Investors, concerned that actions taken over the weekend by the American government to stem a potentially budding banking crisis might not be sufficient, sold First Republic and other, related banking stocks like PacWest and Western Alliance.
Today they are all on the bounce: First Republic is up around 57% as of the time of writing, PacWest is up 76%, and Western Alliance is up a comparatively modest 44%.
Before the government stepped in to calm markets by ensuring that depositors were whole and liquid at SVB, there was concern in the financial world that smaller banks (measured by total assets) could lose their appeal as places to do business. After all, why risk banking with a smaller institution if it could fail, whereas larger institutions could …
