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Rising interest rates also played a significant role. The Federal Reserve was aggressively raising interest rates to combat inflation. This increased the cost of borrowing for banks and also decreased the value of the bonds that banks held, as existing bonds became less attractive compared to newly issued ones with higher yields. As a result, the bank's assets started to look less valuable, making them vulnerable. A crisis of confidence among depositors and investors is what turned this challenging situation into a full-blown crisis. Rumors, amplified by social media and news outlets, can spread like wildfire, adding fuel to the fire and causing a spiral of negative sentiment. The fear can be just as damaging as the underlying economic factors. A combination of rising rates, deposit flight, and a general lack of confidence created the perfect storm that led to the collapse. The **Pacific Western Bank** was just caught in the crossfire.
