Bank shares tumbled on both sides of the Atlantic as a credit scare that started in the US sparked a global sell-off. US regional lenders Zions and Western Alliance plunged over 9%, while in Europe, Barclays and Deutsche Bank fell around 6%.
The panic was triggered by the two US banks disclosing significant bad loans. This news immediately raised the specter of the 2023 SVB collapse, with investors fearing that these are not isolated incidents.
The sell-off was broad, hitting all major stock indices. The FTSE 100 in London fell 0.9%, Germany’s Dax dropped 1.8%, and Japan’s Nikkei 225 fell 1.6%. The pan-European banking sector lost a staggering €37.4 billion in value.
As stocks crumbled, investors rushed into safe-haven assets. Gold prices surged to a new record high. The VIX “fear index” also spiked, signaling a sharp rise in market volatility and investor anxiety.