Oct. 17 at 2:07 AM
$SPY $FAS $DPST
Regional Banks issues:
Zions Bancorporation disclosed a
$50 million third-quarter loss tied to two commercial and industrial loans, prompting investors to worry that other regional lenders may have similar undisclosed problem loans.
Reports of borrower fraud and loan problems at banks such as Western Alliance and related worries about Wall Street exposure spurred further selling and concern about underwriting quality.
Momentum and sentiment effects: the SPDR S&P Regional Banking ETF (KRE) and many individual regional-bank names saw sharp one-day drops as investors fled the sector, turning to safe assets and driving rapid price declines.
Analyst commentary and remarks from large-bank executives suggesting more credit stress “below the surface” intensified the rout by encouraging a precautionary re-pricing of risk in regional-bank loan books.