Bank shares made a sharp turn since the previous session

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First Republic (FRC) and other regional banks were up sharply, in a surprise reversal from the previous session when the sector was rocked by the collapse of Silicon Valley Bank.

Shares of First Republic are up more than 55% after losing a record 62% of their value on Monday.

Western Alliance (WAL) shares are up 47%, while PacWest Bancorp (PACW) shares are jumping 50% after falling 21% on Monday. Zions Bank Corporation (ZION) is up 19% after plunging 25% in the previous session.

Charles Schwab is rebounding 13% on Tuesday after closing 11% lower in the previous session. The stock of the financial services company was well positioned despite it being assured, and there was plenty of liquidity on hand.

Market observers on Twitter noted the oversold positions of regional lenders on Monday, despite measures from US regulators that guaranteed deposits were safe. Noted investor Michael Berry wrote, “This crisis could unravel very quickly. I don’t see a real danger here.”

Last Friday, the Silicon Valley bank owned by SVB Financial (SIVB) was shut down by regulators as depositors flocked the bank to withdraw their money. Many of the Silicon Valley bank’s clients were startups and firms, with accounts ever exceeding $250,000, an amount typically insured by the Federal Deposit Insurance Corporation, or FDIC.

Another domino fell on Sunday. Crypto-focused Signature Bank of New York (SBNY) was shut down by its state chartering authority.

On Sunday evening US regulators announced that all depositors at SVB and Signature Bank would be made whole, and announced new features prevent deposit withdrawals into the banking system.

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Ines is a Senior Business Reporter for Yahoo Finance. follow him on twitter @ines_ferre

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