Arizona-based regional bank Western Alliance (NYSE:WAL) is advancing slightly and trending on social media today, along with many other regional banks. Meanwhile, over the last week, the cost of short selling WAL stock has surged 400%, data from Fintel indicates.

Also noteworthy is that banks have reportedly recently called for a crackdown on the short selling of bank stocks.

Data on WAL Stock

Today, the cost of borrowing Western Alliance’s shares to sell them short has jumped to a maximum annual rate of 10.91%, up from a maximum annual rate of 9.67% on May 5. On May 1, the maximum annual rate was 2.21%; on May 2, it was 3.53%.

According to Fintel, there were 3.1 million shares of WAL available to short as of roughly 9:50 a.m. Eastern, up from only 250,000 at about 7:50 a.m. Eastern. The website ranks Western Alliance number 1,357 out of 4,582 stocks in terms of its chances of undergoing a short squeeze.

Calls for a Crackdown on Short Selling

According to Politico, “financial institutions are pressuring SEC Chair Gary Gensler and other policymakers to crack down — and potentially issue a temporary ban — on short selling strategies.” But the SEC is not considering a ban on short selling, Politico stated. Nevertheless, there are reports that Washington is probing whether bank stocks are being manipulated.

JPMorgan Chase last week predicted that federal agencies could seek to help bank stocks by prohibiting short selling. Alternatively, the FDIC could increase the limit on the deposits it insures, or the Federal Reserve could start lowering interest rates, wrote JPM, which upgraded its rating on regional bank stock to “neutral” and raised its rating on WAL stock to “overweight” from “neutral.”

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.