Regional bank stocks surge while smaller banks struggle.

Shares in PacWest Bancorp surged up to 96% in US trading on Friday, leading a rebound across US regional banking stocks after a week of losses. The KBW Bank Index was up 4.8% on Friday, with KBW’s index of regional lenders up 5.1%. The plunge in regional bank stocks has led to some investors cautioning that there could be more pain to come, while others believe the sell-off has gone too far. The government’s seizure and sale of First Republic Bank earlier this week and a report that PacWest was exploring strategic options revived market nervousness on Thursday, sending peers tumbling.