Following the collapses of Silicon Valley Bank and Signature Bank that had the U.S. financial system on high alert, a Kansas City bank's stock plunged on Monday.
UMB Bank, which has the largest customer base of any bank in the Kansas City area, saw its stock price fall nearly 30% that morning. While it rebounded to about 15% just before the markets closed, as of Wednesday it hasn't come close to its previous price.
Finance professor Bill Keeton, of the University of Missouri-Kansas City, says UMB Bank was a victim of what economists call "contagion"; when the financial issues of one bank cause investors and uninsured depositors at another to worry.
"(UMB) also had a pretty high percent of uninsured deposits, though not as high as Silicon Valley Bank and Signature Bank," said Keeton. "Investors and depositors — just seeing that that, here was another bank that had a lot of uninsured deposits — they started selling the stock."
- Bill Keeton, associate teaching professor at the University of Missouri-Kansas City
