Investors are asking if the bad loan woes at two small US banks are just the “tip of the iceberg,” as the news sparked major global fears and a market sell-off. The developments drew parallels to the start of the 2023 SVB crisis.
Zions Bancorporation and Western Alliance plunged after reporting a combined $150 million in credit issues. This raised “broader questions” about credit quality in a high-rate environment.
The market reaction was swift and brutal. Bank stocks plunged globally, with European lenders losing €37.4 billion. Barclays and Deutsche Bank were among the biggest fallers. Indices in London, Frankfurt, Tokyo, and Hong Kong all dropped.
The VIX “fear index” surged over 22%, and gold hit a new all-time high of $4,378 an ounce. Analysts warned that “storm clouds are gathering” and more “cockroaches” could emerge.
“Tip of the Iceberg?” Small Bank Woes Spark Big Global Fears
