US banks blame 'abusive trading practices' for crisis of confidence
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It did not stop a further 51% being taken off its market value on Thursday.
Western Alliance lost 31% while other notable fallers included Zion Bancorp and Dallas-based Comerica Bank, both of which fell by 12%.
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The ABA's claim that some investors were deliberately fuelling the crisis of confidence was supported by figures from analytics firm Ortex.
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It said short sellers raked in $378.9m in paper profits on Thursday alone from betting against certain regional banks.
The ABA said it had also observed "extensive social media engagement" about the health of various banks that was out of step with general industry conditions.
"We urge the SEC to consider all its existing tools and to take measures to reduce the avenues for abusive trading practices and restore investor confidence," the group's letter said.
"These measures include, at a minimum, a clear message and appropriate enforcement actions against market manipulation and other abusive short selling practices."
It added: "The harm caused by short selling that runs counter to economic fundamentals ultimately falls on small investors, who see value destroyed by others' predatory behavior."
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Friday, May 5, 2023 at 7:59 am