Investors showed renewed optimism in the U.S. banking sector as a number of regional banks that saw steep declines on Monday, including Utah-based Zions Bank, posted recovery numbers at the end of regular trading on Tuesday.
Zions Bank stock finished the day trading at $31.31 per share, up about 4.5% Tuesday, continuing its track of gains following a 44% drop Monday morning.
"Both of them were driven by a very concentrated type of depositor," Simmons told the Deseret News. "That is reasonably unusual in our industry to see these kinds of concentrations of depositors. And that created something fundamentally unstable." Silicon Valley Bank's failure was precipitated in large part by a tsunami of customer withdrawals, some $40 billion in a matter of hours last week, fueled by social media postings claiming the bank was approaching insolvency and accommodated by speedy electronic funds transfers.
On Monday, investors reacted to worries that other banks could experience customer runs like those that pushed Silicon Valley and Signature into closures, even after news over the weekend that the Federal Reserve, U.S. Treasury Department and FDIC would cover uninsured depositors at those banks. Moody's also placed the following institutions under review for potential downgrades: First Republic, Intrust Financial, UMB, Zions Bancorp, Western Alliance and Comerica.
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