Panic Spreads from US Regional Banks to Global Markets

A panic that started with two US regional banks spread rapidly to global markets, causing stock indices in Europe and Asia to tumble. The fear was centered on credit quality after a long period of high interest rates.
The trigger came from Zions Bancorporation ($50m write-off) and Western Alliance ($100m bad loan). This news, while seemingly small, sparked “inevitable comparisons” to the start of the 2023 SVB crisis.
The banking sector was the worst-hit. European lenders lost €37.4 billion in value, with Barclays, Deutsche Bank, and Banco Sabadell all falling around 6%. Japan’s Nikkei and Hong Kong’s Hang Seng also fell sharply.
The anxiety sent investors fleeing to safe havens. Gold prices hit a new all-time high of $4,378 an ounce. The VIX “fear index,” a measure of market volatility, spiked, signaling deep investor unease.