Analysts drew “inevitable comparisons” to the 2023 Silicon Valley Bank (SVB) collapse after two smaller US banks sparked a global market sell-off. Zions Bancorporation and Western Alliance plunged after reporting multi-million dollar bad loans.
While these banks are much smaller than SVB, the news was enough to rattle investors already on edge about high interest rates and recent corporate bankruptcies like Tricolor and First Brands.
The fear spread rapidly. Bank stocks were hammered globally, with European lenders losing €37.4 billion. Barclays and Deutsche Bank fell around 6%. Stock indices in London, Frankfurt, Tokyo, and Hong Kong all dropped.
The market turmoil sent investors running for cover. Gold prices hit a new all-time high of $4,378 an ounce. The VIX “fear index,” a measure of market volatility, spiked to its highest level since April.