Shares of several regional banks including KeyCorp KEY Comerica Inc CMA and Fifth Third Bancorp FITB are rising Tuesday as part of what appears to be a relief rally in the financial sector as several bank names bounce back after coming under heavy selling pressure in recent trading sessions.
What To Know: Several banks sold off following the collapse of SVB Financial Group SIVB toward the end of last week, which sparked contagion fears in the broader financials.
SVB was forced to sell some of its longer-term treasurys at a loss and propose a public offering to cover increased withdrawal requests, which resulted in a bank run that ultimately led to the biggest banking collapse since the 2008 financial crisis.
The Fed stepped in to inject liquidity into the situation over the weekend and announced plans to create a new Bank Term Funding Program centered around protecting institutions.
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The move simply aimed to build back confidence in the banking system, Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg said in a joint statement.
"The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe."
KEY, CMA, FITB Price Action: At time of publication, KeyCorp was up 17.4% at $13.37, Comerica was up 19.9% at $51 and Fifth Third was up 10.8% at $29.09, according to Benzinga Pro.
Photo: Tony Webster from Flickr.
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