Exclusive: U.S. officials assessing possible 'manipulation' on banking shares -source

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Key Points

May 4 (Reuters) - U.S. federal and state officials are assessing the possibility of "market manipulation" behind big moves in banking share prices in recent days, a source familiar with the matter said on Thursday, as the White House vowed to monitor "short-selling pressures on healthy banks."..

Increased short-selling activity and volatility in shares have drawn increasing scrutiny by federal and state officials and regulators in recent days, given strong fundamentals in the sector and sufficient capital levels, said the source, who was not authorized to speak publicly...

"State and federal regulators and officials are increasingly attentive to the possibility of market manipulation regarding banking equities," the source said.. White House press secretary Karine Jean-Pierre said the Biden administration was closely watching on the situation...

"As Ive said, in times of increased volatility and uncertainty, the SEC is particularly focused on identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly, he said in a written statement...

Share price swings did not reflect the fact that many regional banks outperformed on first quarter earnings and had sound fundamentals, including stable deposits, sufficient capital, and decreased uninsured deposits, the source said...

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