SVB 2.0? Regional Bank Woes Spark Global Market Firestorm

A firestorm ripped through global markets, ignited by fears that bad loans at two US regional banks could signal a repeat of the 2023 SVB crisis. The news sent stocks tumbling in Asia and Europe, while investors stampeded into safe-haven assets like gold.
The panic began when Utah-based Zions Bancorporation and Arizona’s Western Alliance reported a combined $150 million in bad loans and write-offs. Their shares subsequently cratered by over 9%, sparking “inevitable comparisons” to the collapse of Silicon Valley Bank.
The contagion spread rapidly. In Europe, the pan-European banking sector lost a staggering €37.4 billion in value. Major players like Barclays, Deutsche Bank, and Banco Sabadell saw their shares plunge by around 6%. Major indices like the FTSE 100 and Germany’s Dax also fell sharply.
Amid the chaos, gold prices surged to a new record of $4,378 an ounce, its best week since the 2008 financial crisis. The VIX “fear index” also spiked, reflecting the deep anxiety gripping investors over potential hidden credit issues in the high-rate environment.