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Banking Turmoil

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https://www.wsj.com/articles/betting-against-banks-brings-reward-and-backlash-8a04b79f

Betting Against Banks Brings Reward and Backlash

Rising interest rates have made short selling fashionable again

May 9, 2023 9:00 am ET

The FDIC seized First Republic Bank in early May and struck a deal to sell the bulk of its operations to JPMorgan Chase. WSJ’s Ben Eisen explains what led to the bank’s failure and what it means for customers, investors and the industry. Illustration: Preston Jessee

Short selling is back in vogue on Wall Street, rewarding some who bet against banks while triggering a backlash.

Short selling, or betting that securities prices will fall, surged over the past year as many investors braced for market turbulence. The approach helped hedge funds beat major stock indexes last year for the first time since 2008.

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