The shares of banks in the United States saw significant drops on Monday despite announcements by regulators that deposits at the failed lenders Silicon Valley Bank (SVB) and Signature Bank will be protected. The stocks of regional lender First Republic Bank tanked the most, slumping by over 60% on Monday, accounting for the largest share loss.

At the time of filing this report, the stocks of the California-based bank had dipped by over 65% to about $28. Other banks and financial services companies saw their stock prices plummet: Western Alliance Bancorp by 64% to $18, KeyCorp by 37% to 11% and PacWest Bankcorp by 30% to $7.

Other lenders are as followed: Zions Bancorporation by 25% to $30, Charles Schwab by 11% to $52 and Bank of America by 3% to $29, among others. Many of these stocks were halted several times during the day due to the volatility.

Furthermore, the fall in prices is despite the fact that the Federal Reserve launched a new Bank Term Funding Programme to provide loans of up to a year to banks in exchange for high-quality collaterals like Treasuries.

However, First Republic Bank says it remains strong. Jim Herbert, the bank’s Executive Chairman told CNBC on Monday that the lender was operating as usual. The bank on Sunday announced that it received extra funding from the Federal Reserve and JPMorgan, bringing the bank’s reserve liquidity to about $70 billion.

Today, we announced a further strengthening and diversification of our liquidity position. This increase in available liquidity reinforces the safety and stability of First Republic. We are grateful to our clients for their continued support. https://t.co/eucaVOEjoy

— First Republic (@firstrepublic) March 13, 2023

SVB Throws US into Largest Bank Failure since 2008

The plummeting shares of the US banks occurred days after SVB, a lender that serves technology firms, collapsed following its inability to meet client withdrawal needs. The withdrawal frenzy among investors had been spurred by rising interest rates in the past year.

To meet the needs, last Wednesday SVB sold its bond portfolio comprising mostly of US Treasures at a $1.8 billion loss. In addition, the company announced plans on Thursday to offer its investors common equity and preferred convertible stocks worth $2.25 billion. However, by Friday, the Federal Deposit Insurance Corporation admitted that SVB is under its receivership. The UK arm of the bank was sold to HSBC for £1.

To prevent contagion, on Sunday, New York regulators shutdown Signature, a full-service bank, in its bid to “protect depositors.” However, the cryptocurrency exchange, Coinbase, and the stablecoin issuer, Paxos later disclosed their massive exposure to Signature Bank.

In addition, the Federal Reserve on Sunday launched the Bank Term Funding Programme, which is a $25 billion funding scheme to support institutions, such as commercial banks to cover their liquidity needs in times of emergency.