A plunge in the shares of Zions Bancorporation (over 10%) and Western Alliance (over 9%) sparked a global sell-off in bank stocks. The two US regional lenders announced significant bad loans, raising fears of wider credit stress.
The news, which included a $50m write-off by Zions and a $100m bad loan at Western Alliance, drew immediate comparisons to the 2023 SVB collapse. Analysts fear a “domino effect” as high rates bite.
The panic spread to Europe, where the banking sector lost €37.4 billion. Barclays fell nearly 6%, while Deutsche Bank and Banco Sabadell also saw steep drops. Asian markets, including the Nikkei and Hang Seng, also fell sharply.
Investors, seeking refuge, piled into gold, pushing the price to a new record high of $4,378 an ounce. The VIX “fear index” surged, reflecting the deep nervousness in the market.