Banks’ new problem: The market is predicting they will fail

Politics

Regional bank stocks are swooning. But don’t expect bank regulators to act unless they see deposits start to crumble.

The FDIC’s sale of failed First Republic Bank to JPMorgan Chase earlier this week — which JPMorgan CEO Jamie Dimon said would hopefully draw the “mini-bank crisis” of the last two months to a close — failed to stop shares tanking at institutions like PacWest Bancorp and Western Alliance.

A U.S. official told POLITICO that the market gyrations aren’t cause for the government to step in with more sweeping action, with deposit flows still relatively stable.