Bad Loan Fears at US Banks Wipe €37.4bn Off European Lenders

Fears over bad loans at two US regional banks triggered a global panic, wiping €37.4 billion off the value of the pan-European banking industry. Barclays, Deutsche Bank, and Banco Sabadell were among the worst hit, all falling 6% or more.
The crisis began when Zions Bancorporation and Western Alliance announced a combined $150 million in bad loans and write-offs. This news, though seemingly isolated, sparked fears of a wider credit problem.
The sell-off was global, with stock indices in Europe and Asia tumbling. The FTSE 100 fell 0.9%, Germany’s Dax dropped 1.8%, and Japan’s Nikkei 225 fell 1.6%.
The episode drew comparisons to the SVB collapse, fueling a “flight to safety.” Investors dumped stocks and bought gold, pushing the precious metal to a record $4,378 an ounce. The VIX “fear index” also surged, reflecting the deep uncertainty.